IMF stress-tests Japanese banks The International Monetary Fund said Thursday it is performing stress tests on Japanese banks to measure their vulnerability to systemic shocks. An IMF spokeswoman said the tests were part of a broader review of the Japanese financial sector, aimed at assessing stability and supervision and the impact of new global regulations. But they also come after the IMF noted a possible weakness in the banks through their huge holdings of Japanese government bonds. The worries focus on the risk of large losses for the banks if markets lose their appetite for JGBs, given the government's already massive debt burden. "A JGB bond shock, particularly if accompanied by an equity-price drop, would imply large capital losses for the principal creditors, which are Japanese banks and pension funds," the IMF said in a report to the Group of 20 major economies in November.