ABSTRACT
Ever since Prime Minister Ryutaro Hashimoto introduced new plans for financial sector reform in 1996, the financial system of Japan has undergone dramatic changes. The reform plan known as the Financial Big Bang in Japan, covered wide areas in finance. It called for the liberalization of asset management businesses such as trust banks, insurance companies, and investment trust companies. The plan also included reforms for the promotion of capital markets, the reduction of entry barriers in various financial institutions, and new regulations for sound management of the banking system. The Big Bang was intended to promote fair and free financial system based on accepted global standards. It was motivated by the recognition that the prolonged crisis in the financial system was rooted in the inefficiency of the financial markets; more precisely, in the lack of market competition and in the opaque policies of the Ministry of Finance (Horiuchi 2000).
