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Japan?s Financial Markets: The Lost Decade


  • Reszat, Beate


Recent debates about the state of Japan's financial system focus on the weakness of Japanese banks. But, in the complex financial relations of an advanced economy bank finance cannot be seen separate from other forms of financial intermediation. Despite the reform efforts under the Big Bang program, financial markets in Japan show severe signs of malfunctioning, distortion and backwardness. The paper gives an overview of the current state of markets for money, bonds, equities and derivatives arguing that for reform to become successful measures to develop an entirely different market culture were needed. It calls for a redefinition of the role of interest groups in the financial intermediation process – including the role of government.

Suggested Citation

  • Reszat, Beate, 2003. "Japan?s Financial Markets: The Lost Decade," HWWA Discussion Papers 231, Hamburg Institute of International Economics (HWWA).
  • Handle: RePEc:zbw:hwwadp:26335

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    References listed on IDEAS

    1. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    2. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    3. Allen, Franklin & Santomero, Anthony M., 1997. "The theory of financial intermediation," Journal of Banking & Finance, Elsevier, vol. 21(11-12), pages 1461-1485, December.
    4. Maximilian J.B. Hall, 1993. "Banking Regulation And Supervision," Books, Edward Elgar Publishing, number 201.
    5. Flath, David, 2014. "The Japanese Economy," OUP Catalogue, Oxford University Press, edition 3, number 9780198702405.
    6. Dosi, Giovanni, 1997. "Opportunities, Incentives and the Collective Patterns of Technological Change," Economic Journal, Royal Economic Society, vol. 107(444), pages 1530-1547, September.
    7. repec:bis:bisqtr:0112f is not listed on IDEAS
    8. Maximilian J.B Hall, 2002. "Banking Regulation and Supervision in Japan," FMG Special Papers sp139, Financial Markets Group.
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    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East


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