A Reassessment of Japan's Big Bang Financial Regulatory Reform

Bruce E. Aronson
Additional contact information
Bruce E. Aronson: Visiting Professor of Law, University of Washington School of Law; Professor of Law, Creighton University School of Law (E-mail: aronson@creighton.edu)

No 11-E-19, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: This paper reassesses the results of Japan's financial deregulation over the last two decades. Japan's Big Bang sought to transform a highly regulated bank-centered financial system to a transparent, market-centered financial system to revitalize Japan's economy and aging society. Prior assessments generally view this reform effort as a failure due to Japan's low economic growth rate. This paper finds, contrary to conventional wisdom, that government-led deregulatory and administrative reform was largely successful in removing legal and administrative obstacles to the development of a market-centered financial system. However, the persistence of past practices by market participants and strong headwinds such as low macroeconomic growth and poor financial market performance prevented achievement of the Big Bang' s ambitious goals. This illustrates both the limits of what can be accomplished through deregulation of financial markets and the problem inherent in using a results-oriented standard in evaluating Japan's reform efforts.

Keywords: Big Bang; Financial Deregulation; Financial Reform; Corporate Bond Market; Venture Capital; Financial Center (search for similar items in EconPapers)
JEL-codes: G18 G21 G24 K22 (search for similar items in EconPapers)
Date: 2011-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.imes.boj.or.jp/research/papers/english/11-E-19.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ime:imedps:11-e-19

Access Statistics for this paper

More papers in IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Kinken ().