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Modernizing the financial system in Japan during the 19th century: National Banks in Japan in the Context of Free Banking

Author

Listed:
  • Masato Shizume

    (Faculty of Political Science and Economics, Waseda University)

  • Masayoshi Tsurumi

    (Institute of Comparative Economic Studies, Hosei University)

Abstract

In this paper, we explore the role of competing concepts of the banking system in the process of modernizing the financial system in Japan. The country has a long history of its own version of private note issuance dating back to the early 17th century. In the late 19th century, the Japanese government considered two options for modernizing its financial system, national/free banking as in the United States, and central banking as in Europe. It first decided to adopt the former because the Japanese economy was decentralized and more closely resembled the economy of the United States than that of the European countries. However, the Japanese government customized the banking system for the Japanese situation. After some trial and error, the government turned to the latter option and established the central bank in 1882.

Suggested Citation

  • Masato Shizume & Masayoshi Tsurumi, 2016. "Modernizing the financial system in Japan during the 19th century: National Banks in Japan in the Context of Free Banking," Working Papers 1607, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:1607
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    References listed on IDEAS

    as
    1. Mari Ohnuki, 2007. "The Bank of Japan Network and Financial Market Integration: From the Establishment of the Bank of Japan to the Early 20th Century," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(1), pages 95-128, March.
    2. Ignacio Briones & Hugh Rockoff, 2005. "Do Economists Reach a Conclusion on Free-Banking Episodes?," Econ Journal Watch, Econ Journal Watch, vol. 2(2), pages 279-324, August.
    3. Miyajima, Shigeki & Weber, Warren-E, 2001. "A Comparison of National Banks in Japan and the United States between 1872 and 1885," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 19(1), pages 31-48, February.
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    Cited by:

    1. Masato Shizume, 2017. "A History of the Bank of Japan, 1882-2016," Working Papers 1719, Waseda University, Faculty of Political Science and Economics.
    2. Masato Shizume, 2016. "Financial Crises and the Central Bank: Lessons from Japan during the 1920s," Working Papers 1611, Waseda University, Faculty of Political Science and Economics.
    3. SERGI BASCO & John P. Tang, 2017. "The Samurai Bond: Credit Supply And Economic Growth In Pre-War Japan," CEH Discussion Papers 05, Centre for Economic History, Research School of Economics, Australian National University.

    More about this item

    Keywords

    the modern banking system; free banking; national banks; the Bank of Japan;

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