IFM Okubo 06 11 2001

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Yoshio Okubo Financial Service Agency, Japan IDB-JCIF Workshop June 11-12, 2001 Note: Opinions expressed are the authors own, not necessarily official views of FSA.

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Figure 1: Stock and Land Price Index 1980 - 2001

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Figure 2: Japan Premium 1996 - 2001 Source: Nomura Research Institute

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Figure 3: Development of the Japanese Economy

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 1: Financial Institution in Japan Note: Of the 18 major banks, 11 banks are in the process of being formed into four major financial groups in a few years. (Number of financial institutions in each category)

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 2: Outline of the Prompt Corrective Action Note:”Capital” for domestic standard is defined differently from that for international standard.

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 3: Non-performing Loans held and disposed by Japanese Banks Outstanding non-performing loans (all Japanese banks)

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 3: Non-performing Loans held and disposed by Japanese Banks Loss on disposal of non-performing loans (all Japanese banks)

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 3: Non-performing Loans held and disposed by Japanese Banks Non-performing Loans secured by collaterals, guarantees, or provisions

Financial Sector Reform in Japan: 

MOF FSA FRC MOF June 1998 FSA FRC July 2000 FSA January 2001~ Financial Sector Reform in Japan Table 4. Changes in Regulatory and Supervisory Structure in Japan

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 5: “BIG BANG” Financial System Reform 1. Expansion in means of asset investment. 2. Facilitation of corporate fund-raising. 4. Create efficient markets. 3. Provide a wider variety of services. 5. Assure fair trading. 6. Ensure soundness of intermediaries and prepare system for dealing with failures.

Financial Sector Reform in Japan: 

Financial Sector Reform in Japan Table 6: Economic Package (April 6, 2001) 1. NPL - Corporate Restructuring (a) 2-years / 3-years framework. 2. Banks’ Stock Holdings Monitoring by the FSA. Disclosure - Market discipline. (b) Guideline for private sector workout. (c) Comprehensive review on various institutional aspects related to corporate restructuring. 3. Strengthening Capital Markets DIP finances bankruptcy regimes