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Scope of Maximum Interest Rate Regulations (Report of Workshops (1))

Author

Listed:
  • Kazutoshi Sugimura

    (Bank of Japan)

  • Masaru Itatani

    (Bank of Japan)

  • Masaki Bessho

    (Bank of Japan)

Abstract

Statutory provisions regulating maximum interest rates (referred to generally hereafter as "maximum interest rate regulations") employ words that are interpreted to include various payments to creditors such as "fees" in addition to "interest in substance" (i.e. "compensation for the use of principal"). Although this is considered effective in preventing evasion of regulation, it may have the effect of including payments made by parties to financial transactions without any intention to evade these regulations. The Report of the Workshops on "Contemporary Financial Transactions and Their Regulatory Treatment" (2016) (the "Report") explores this issue with regard to the interpretation of relevant laws and legislative actions. The Report refers to economics discourses related to maximum interest rate regulations and clarifies the intent and purpose of such regulations.

Suggested Citation

  • Kazutoshi Sugimura & Masaru Itatani & Masaki Bessho, 2017. "Scope of Maximum Interest Rate Regulations (Report of Workshops (1))," Bank of Japan Research Laboratory Series 17-E-1, Bank of Japan.
    • Handle: RePEc:boj:bojlab:lab17e01
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    More about this item

    Keywords

    Maximum interest rate regulations; Deemed Interest; Arrangement fees;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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