Bank of Japan Stress-Tests an AI Crash, Finds Banks' Capital Ratios Hold Up
emmanuelvivier · x · 2026-10-25
The Bank of Japan's October 2026 Financial System Report ran macro stress tests simulating a decline in expectations for AI-related investment profitability, amplified through portfolio adjustments in foreign non-bank financial intermediaries (NBFI). The assessment concluded that banks' capital ratios remain above regulatory requirements and the financial system would withstand an AI crash scenario, though asset prices and AI investment uncertainties warrant close monitoring.
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