2. The main elements of Japan's financial
system are much the same as those of other
major industrialized nations: a
commercial banking system, which
accepted deposits,
extended loans to businesses, and dealt
in foreign exchange; specialized
government-owned financial institutions,
which funded various sectors of
the domestic economy; securitiescompanies,
which provided brokerage services,
underwrote corporate
and government securities, and dealt in
securities markets; capital markets, which
offered the means to finance public and
private debt and to sell residual corporate
ownership; and money markets, which
offered banks a source of liquidity and
provided the Bank of Japan with a tool to
implement monetary policy.
3. Japan's traditional banking system was segmented
into clearly defined components in the late 1980s:
commercial banks (thirteen major and sixty-four
smaller regional banks), long-term credit banks
(seven), trust banks (seven), mutual loan and
savings banks (sixty-nine), and various specialized
financial institutions. During the 1980s, a rapidly
growing group of nonbank operations—such as
consumer loan, credit card, leasing, and real
estate organizations—began performing some of the
traditional functions of banks, such as the issuing of
loans.
4. In the early postwar financial system, city banks provided
short-term loans to major domestic corporations while
regional banks took deposits and extended loans to
medium-sized and small businesses. Neither engaged much
in international business. In the 1950s and 1960s, a
specialized bank, the Bank of Tokyo, took care of most of
the government's foreign-exchange needs and functioned
as the nation's foreign-banking representative. Long-term
credit banks were intended to complement rather than to
compete with the commercial banks.
5. In 1990, the five largest
banks in the world,
measured by total assets,
were Japanese banks.
These banks opened
branches abroad,
acquired existing foreign
banks, and became
engaged in new
activities
6. As of March 1989, the five largest city
banks in Japan (in order of total fund
volume) were Dai-Ichi Kangyo
Bank, Sumitomo Bank, Fuji
Bank, Mitsubishi Bank, and Sanwa Bank.
7. A group of government
financial institutions
paralleled the private
banking sector.
These institutions derived
their funding from deposits
collected by the postal
savings system and
deposited with the Trust
Fund Bureau. The postal
savings system, through
the 24,000 post offices,
accepted funds in various
forms, including savings,
annuities, and insurance.
8. Banking, insurance, real estate, transportation, retail,
telecommunications and construction play a significant
role in the economy. Japan has a large industrial capacity,
and it contains some of the largest producers of motor
vehicles, electronics, machine tools, steel, ships,
chemicals, textiles and food products.
Japan has well built financial system.
