(1) The progress of Japan's financial liberalization and internationalization
Before the bubble economy, the economy of Japan saw the progression
of the liberalization of the financial sector
with changes in enterprise funding provisions and the expansion
of the government bonds market in the background. For example,
there was a progression of deregulation such as liberalization
of deposit interest and mutual entry between banks and securities
firms through their subsidiaries.
(2) The rise and collapse of the bubble economy
During the rise and then collapse of the bubble economy, especially around 1990, banking institution's management of bad debt became a tension-filled and serious issue.
In this manner, with apparent problems in all markets after the
collapse of the bubble, there was a strengthening of marketing
rules, the thoroughness of disclosure and of observational faculties.
Also, in the midst of the decline in land value, banking institution's
bad debt and bankruptcy control were carried out, and processing
reduction and legislative systems were adjusted.
(3) Comparisons with the European market On the other hand, during this period the financial markets in Europe and the U.S. steadily continued to progress. The U.S. overcame the S&L crisis, and its economy, as well as the financial and security markets, expanded smoothly. In Europe, by the end of this century, the unified currency-Euro- will become a reality.
It is also a fact, that when comparing the market situations in the foreign exchange transactions and stock dealings of Tokyo with those of New York and London, the recent Tokyo market can be seen as being held in check.
Further, looking at the private financial assets of the leading countries, the second to the U.S., Japan's total amount has risen to 1200 trillion yen. It is essential that these financial assets be used effectively, benefiting Japan's economy, and in a way profitable to the people of Japan.
In this background, the absolute importance of a "financial
system reform," or, Big Bang, to revitalize Japan's financial
market as an international financial market on the level with
London and New York, by the year 2001, has been recognized.
[About the financial system reformation (The Japanese version of the Big Bang)]