Outline of Funding Operations
Regarding deficits arising from the execution of operations, the DICJ is authorized to raise funds for each account (except for the Enterprise Turnaround Initiative Corporation Account) in the form of borrowings and/or DICJ bond issues up to the amount separately stipulated by a relevant Cabinet Order (in the case of the Jusen Account and the Damage Recovery Distribution Account, only borrowings are allowed).
Government guarantee can be provided for funding for accounts other than the Jusen Account and the Damage Recovery Distribution Account under the ordinances concerning borrowings or DICJ bond issues (the upper limit on the total amount of government guarantee as stipulated in the general provisions of the budget was set at ¥51 trillion).
The outstanding balance of funds raised by the DICJ at the end of the fiscal year peaked in FY2002, and stood at around ¥4.1 trillion at the end of FY2010.
The DICJ has been raising funds in an efficient manner by combining borrowings (up to one year, in principle) and issuance of DICJ bonds (with maturities of two, four and seven years) in accordance with the length of periods during which funds are needed in light of the market environment. Consequently, funds raised through the issuance of DICJ bonds account for around 89% of the outstanding balance of funds raised, which totaled some ¥4.1 trillion as of March 31, 2011.
Outstanding balance of funds raised by the DICJ
|End of FY2008||End of FY2009||End of FY2010|
|Crisis Management Account||1,841.3||1,796.3||1,371.4|
|Financial Revitalization Account||1,920.5||1,900.8||1,879.4|
|Early Strengthening Account||1,000.0||1,000.0||400.0|
|Financial Function Strengthening Account||167.2||348.7||349.0|
|Damage Recovery Distribution Account||0.2||0.2||0.2|
1. Issuance of DICJ bonds for the Early Strengthening Account started in October 1999.
2. Issuance of DICJ bonds for the General and Financial Revitalization Accounts started in April 2003.
3. Issuance of DICJ bonds for the Crisis Management Account started in April 2004.
4. The assets and liabilities of the Management Base Strengthening Account were transferred to the Financial Functions Strengthening Account on April 1, 2005.
5. Issuance of DICJ bonds for the Financial Functions Strengthening Account started in May 2010.
Changes in the outstanding balance of funds raised by the DICJ
Changes in the annual issuance of DICJ bonds
The amount of DICJ bonds issued in FY2010 decreased from FY2009 to •780 billion. While the DICJ replaced the borrowings in the Financial Functions Strengthening Account with DICJ bonds (2-year bonds), planned issuance of DICJ bonds (•300 billion) in the Crisis Management Account was canceled following the repayment of public funds.
The balance of outstanding borrowings decreased substantially to •462.3 billion at the end of FY2010 from •1,534.9 billion at the end of FY2009, because of such factors as (i) insurance premium revenues in the General Account, (ii) the repayment of public funds in the Crisis Management Account, and (iii) the replacement of borrowings by DICJ bonds in the Financial Functions Strengthening Act. Under these circumstances, the DICJ endeavored to raise funds in a more efficient manner by, for example, making the borrowing periods more flexible within the basic borrowing period of one year, in order to reflect the actual funding conditions of each DICJ account more precisely. In the resolution of the failure of the Incubator Bank, meanwhile, in order to respond to the first-ever case of reimbursement of insured deposits under the limited coverage, the DICJ provided the failed bank with loans in several rounds under the provisions of Article 127 of the Deposit Insurance Act. The DICJ raised funds for these loans in an expeditious and flexible manner, borrowing funds from the Bank of Japan urgently and temporarily (for the first time since FY2001), and then sequentially shifting to borrowings of unsecured call money and borrowings from financial institutions.
In addition, the DICJ strove to continue stable and efficient funding by holding meetings with financial institutions that participate in fund-borrowing auctions to brief them on the status of the DICJís borrowings, thereby sharing information on the status of the DICJís borrowings and borrowing plans, etc.
Outline of DICJ accounts
Funding methods (as of the end of March 2011)
|Auction method||Competitive bidding||Competitive bidding|
|Auction style||Convention style
|Funding period||Up to one year in principle||Two, four, seven years|
|Number of eligible auction participants||67 companies||17 companies|
Interest rate on funding (for funds raised in FY2010)
(guaranteed by the government)
|DICJ Bond subscriberís yield
(guaranteed by the government)
|Unsecured call money||Borrowing rate
(without government guarantee)
(Damage Recovery Distribution Account)
Note: Weight-averaged by the amount of funds raised.