By Takahiko Wada
TOKYO (Reuters) - Japan's financial regulator is extending provisions that help regional financial institutions get public funds in response to risks posed by Britain's vote to leave the European Union, sources said on Tuesday.
The Financial Services Agency, the regulator overseeing banks, securities brokerages and other financial institutions, is extending by five years a programme allowing regional banks and credit unions to borrow from the public purse more easily, people knowledgeable about the matter told Reuters.
The extension comes as authorities remain wary of risks posed by Brexit.
The day after Britain's June 23 vote, Japan's stocks suffered their biggest daily fall in more than five years, while financial markets were roiled and fears raised of a shock to the already fragile global economy.
The Nikkei's<.N225> drop was its steepest since March 2011, when threats of a nuclear catastrophe following a devastating earthquake and tsunami had sent financial markets reeling.
In the wake of the nuclear disaster, the FSA set up a safety net under an Act on Special Measures for Strengthening Financial Functions, which scrapped requirements such as setting profitability goals for regional financial institutions when applying for much-needed public funds.
The deadline for applying for funds under the scheme was originally set at March 2017.
The FSA is also extending by five years, to 2022, a deadline for Banks' Shareholdings Purchase Corporation, which buys shares in Japanese banks to help reduce cross-shareholding among banks, to purchase equities, the sources said.
Government financial assistance to Life Insurance Policyholders Protection Corporation of Japan, which offers support to bankrupt life insurance companies, is also to be extended by five years from March 2017, the sources said.
(Writing by Minami Funakoshi; Editing by Robert Birsel)