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Searching for New Regulatory Frameworks for the Intermediate Financial Market Structure in Post-Crisis Asia

In the first paper, the author discusses how Japan's commercial banking system helped the industrial sector to respond to the post-war challenges faced by the country. It analyzes the experience of Japanese main banks in developing their managerial capacity from a practitioner's point of view. This paper's sections examine the major functions or qualifications -both explicit and implicit- of main banks; these functions are interlocking; through them, managerial capacity can be most effectively employed. Other sections examine the normal course of career development within main banks; the implicit aspects of corporate monitoring or restructuring procedures through the standard mode of credit risk appraisal; managing business growth and corporate relationships through overall portfolio review, as well as through proactive responses to fundamental changes within the economic environment; and the overall features and implications of managerial capacity at the micro, system, and policy levels. The second paper attempts to apply these lessons learned to formulate a banking sector strategy that may assist the former socialist economies to successfully make the transition to market-oriented economic systems. Sections address the economic systems appropriate to different systems, exploring the major factors affecting policy framework; the need to build institutional systems facilitating the resolution of macro economic and micro-management policy problems; the core role of the banking system in handling new investment financing, inherited debt, enterprise restructuring, equity investment, and local financial market development; a general course of privatization governments may pursue whatever specific schemes they design or implement; and controversial aspects of industrial policy.

Sunumura Satoshi

Papers

Japan's main banking system. The role of the banking system in restructuring and privatizing state enterprises in transitional socialist economies