The Japanese Financial Services Agency will strengthen its review of the $67 billion bank restructuring of Japanese government bonds.

Gate News bot reported that, according to Bloomberg, sources revealed that Japan's financial regulatory agency plans to strengthen its scrutiny of approximately $67 billion in high-yield loans, which are backed by government bonds and other assets that are quite popular among local banks.

According to informed sources, during a routine meeting with local bank executives on Wednesday, a senior official from Japan's Financial Services Agency ( FSA ) called for lending institutions to disclose the quantity and market value of the bonds they hold.

Insiders say that the FSA will review these disclosures and may consider taking additional action if necessary. They also stated that the FSA plans to publish an assessment report by the end of the year.

FSA spokesperson declined to comment.

After some local banks quickly increased their holdings of repackaged Japanese government bonds and other structured loans, regulators expressed dissatisfaction with the oversight of such loans. Officials are concerned that these companies may lack proper risk management for these opaque products, and if market interest rates move against them, they could incur increasingly large losses.