Regulators are increasing the pressure on regional banks to consolidate, worried that shrinking populations outside Japan's major cities will leave lenders too weak to stand on their own.
After direct prodding from the head of the Financial Services Agency for the more than 100 regional banks to slim down through mergers or takeovers, the regulator has set up meetings with regional bank presidents to grill them on their long-term business plans.
The agenda is implicit but clear, bankers and regulators say: Show how you plan to survive over the coming decades as local economies wither, or look for tie-ups. The FSA's push will likely accelerate a process, dictated by demographics, that had been expected to take decades, banking industry insiders say.
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