ABSTRACT
The misfortune of Japanese banks created opportunities for foreign financial institutions. Officials at the Ministry routinely disclosed any new arrangement or product to other japanese banks to get their reaction. Perhaps more imponderable but nonetheless apparent, US banks seemed to lose interest in, and the will to develop, foreign operations, even when opportunities appeared. The opportunity therefore existed for foreign pressure to become a factor in Japan’s domestic debate over the government’s role in the financial markets. By the 1990s, foreign banks in Japan operated under a drastically altered financial system. Foreign banks therefore found their innovative approach transmitted to the marketplace even before the first deal occurred. Options, futures, and other derivative products had a tortuously slow introduction in Japan, with the Ministry of Finance relying on the usual step-by-step approach. Foreign financial institutions continued to move away from conventional banking aaivities.
