The Japanese Financial Services Agency from 1998 to 2010: A regulatory state in the making

The nature of the modern Japanese state has fueled an intense academic debate. Yet, the implementation of regulatory institutions has rarely been included in the discussion. To bridge that gap, we tackle the creation and evolution of the Japanese financial regulation agency from its establishment in 1998 to the arrival of the subprime crisis in Japan in 2010. Contrary to their image of immobility, we show that agencification deeply reshaped Japanese administrations. Our methodological approach mobilizes historical institutionalism to study legal instruments. Firstly, by analyzing the laws and decrees, we study the structural changes in the FSA. Secondly, we focus on the FSA’s new rule‑making procedures. Finally, through a study of the legal basis for the sanctions imposed by the FSA between 2002 and 2010, we look at the consequences of this institutional change on financial supervision practices in Japan. By bringing the agencification process into dialogue with new financial regulation practices, we contribute to the discussion on the transformation of the Japanese state since the 1990s. Through the study of the transformation of Japanese financial regulation system, we show the construction of the Japanese variety of regulatory state.