chapter  2
18 Pages

Financial structure and the flow of funds

Japan's financial structure The financial structure of the post-war period was one confined by regulations, particularly from the viewpoint of the 1980s with its slow growth rates, floating exchange rates, on-line computers, and rapid telecommunications systems. Regulations in the fast growth period was focused on interest rates, particularly those of depository institutions and the private sector, and provided incentives for the private sector to circumvent the regulations. Regulatory authorities realized that regulations did not answer the financial needs of the economy and was a barrier to efficiency and fairness. Consequently, regulations were relaxed and gradually abolished.