February 12, 2016 / 7:26 PM / 2 years ago

Negative rates not meant to pinch bank profits -BoJ's Nakaso

NEW YORK, Feb 12 (Reuters) - The Bank of Japan designed its new policy of negative interest rates to alleviate any unintended burden on banks' profitability, a top BoJ policymaker said on Friday, adding he thought the recent drop in bank shares was "overdone."

The three-tiered negative rates system "is carefully designed to mitigate aggressive impact on banks' profitability while ensuring the effect of negative rates on prices in financial markets," said Hiroshi Nakaso, deputy governor of the Bank of Japan.

"We have seen a substantial drop in bank shares in the ... past couple of days," he added at a New York forum. "But I think this is a bit overdone in this regard."

Reporting by Jonathan Spicer; Editing by Chizu Nomiyama

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