TOKYO, Dec 16 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Tuesday the central bank needed to think carefully before taking on credit risks of the private sector.
"Our basic idea is that taking on credit risks from the private sector needs consideration from various angles, such as how it will divide the role with the government and how to secure the health of the BOJ's balance sheet," Shirakawa told parliament's upper house financial committee.
Deputy Governor Hirohide Yamaguchi also said the bank needs to be cautious about taking on credit risks but added the bank would watch market conditions when considering whether to buy commercial paper.
"CP, as you know, is an asset with credit risks. As our main duty is to provide liquidity, we need to be cautious about buying assets with credit risks," he told the committee. (Reporting by Hideyuki Sano and Yuzo Saeki; Editing by Rodney Joyce)