Major Transformation of the Japanese Financial System

Author: Wu Zunjie
Publisher:
Publish Date: 2006-09-01
Features: After the collapse of the "bubble economy" in the 1990s, Japan undertook radical reforms of its financial system, which was dominated by banking. The goal of the reforms was to make the financial system adaptable and supportive of economic, technological, and social development. The idea of transforming the financial system according to different stages of economic development holds strong implications for China, which is in the process of transition. The reason this book studies Japan's financial system is that it played a pivotal role in the rapid development of Japan's economy, particularly its key industries, after World War II and up to the late 1980s. However, when Japan caught up with Western countries economically, its industrial structure and domestic and international environment underwent significant changes. The financial system did not undergo major reforms or adapt to the new circumstances, ultimately leading to Japan's economic stagnation. Since the collapse of the "bubble economy" in the 1990s, Japan has experienced over a decade of economic decline, labeled as the "lost decade."