 Reform of Banking Regulation in Japan in the 1990s: Has the Market Become Competitive?Soichiro Kozuka Japanese Economy, 2005, vol. 33, issue 1, 50-68 Abstract: The Japanese financial system once followed such a meticulously detailed set of regulations that it was described as a "convoy system." As a result of both major and minor structural reform efforts undertaken in the 1990s, however, it is now characterized by a principle of competition rather than regulation. This is a result not only of the liberalization efforts that have been under way since the late 1980s but also of the regulatory developments that have been undertaken to ensure that the stability of the entire financial system will not be threatened by the bank failures that will inevitably result from competition. In spite of these regulatory reforms, however, the banking market does not seem to be sufficiently competitive from the borrower's perspective. This may be because the problem of information asymmetries inherent in lending hinders the full functioning of competition. Under these circumstances, it may be that transaction mechanisms need to be developed to solve the problem of asymmetric information. Covenant loans, which have recently grown in popularity, may be one such mechanism. Date: 2005 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mes:jpneco:v:33:y:2005:i:1:p:50-68 Ordering information: This journal article can be ordered from DOI: 10.1080/2329194X.2005.11045209 Access Statistics for this article More articles in Japanese Economy from Taylor & Francis Journals |
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