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Department of Financial & Management Studies (DeFiMS)

The Japanese financial system

Course Code:
15PFMC073
Unit value:
0.5
Taught in:
Term 2

Course running 2012/13 TBC

This course examines the development of Japan’s distinctive financial system, its difficulties during the long period of stagnation of the 1990s, reforms including the ‘Big Bang’ reform of 2001, and the recent emergence of restructured financial institutions including large international banks. These issues link with international developments outside Japan, in corporate finance, corporate governance, financial regulation including capital adequacy and risk management frameworks, technological change and contestable markets. They also link with wider economic issues within Japan, including the relation between financial and non-financial firms, macro-economic policies and problems, and political issues of reform; and with the internationalisation of Japanese non-financial firms especially within the wider region, including China and South-East Asia.

Objectives and learning outcomes of the course

The overall objectives of the course are to:

  • describe and explain the changing nature of the Japanese financial system as part of the Japanese business environment in the high-growth and the low-growth periods
  • analyse the importance of changes in the legal and regulatory framework for Japanese banking and capital markets
  • analyse changes in the pattern of corporate financing in the high and low-growth periods (including international aspects)
  • analyse the changing place of financial firms in relation to nonfinancial firms in keiretsu structures
  • consider the functioning of the financial system from the point of view of the Japanese consumers/ households

By the end of the course students should be able to:

  • describe and explain institutional problems of Japanese financial firms during the late 1980s and 1990s low-growth period and institutional responses (eg mergers)
  • explain the distinctive features of corporate financing in Japan in the high-growth period
  • assess the character of Japanese financial 'deregulation' after the mid-1980s and contrast this with experience in other advanced capitalist countries
  • Discuss examples of changed structures of interfirm organisation in keiretsu
  • Analyse the role of international factors in the changing pattern of corporate finance in large companies
  • Discuss with examples the experience of Japanese financial firms in international markets
  • Discuss financial services for the Japanese consumer with international comparisons

Method of assessment

Assessment for this course is by one tutorial presentation at 10%; an essay of 4,000 words at 30%; an unseen written examination at 60% of the total grade; all elements except the presentation may be resubmitted