Kenneth Clarke, Britain's chancellor of the exchequer, urged Jan. 9 that sweeping deregulation of Japan's financial system be undertaken sooner than the current timetable of 2001, according to government officials.During a meeting with Finance Minister Hiroshi Mitsuzuka, Clarke said he hopes the reforms, which have been dubbed the Japanese version of the 1986 "Big Bang" securities deregulation in Britain, will contribute to the international financial system, ministry officials said.Because Japan's markets are large, the faster deregulation takes place the better, Clarke was quoted as saying. Mitsuzuka responded by saying that Japan also hopes to complete the reforms as swiftly as possible, citing as an example that restrictions in the nonlife insurance market would be lifted in July 1998. He also said that following Britain's example, Japan will kick off its deregulation initiative by revising the Foreign Exchange and Control Law to allow individuals and firms other than authorized banks to handle foreign exchange.Japan's proposed "Big Bang," a set of wide-ranging reform measures intended to reinvigorate Tokyo as a global financial center, was outlined by Prime Minister Ryutaro Hashimoto in November with the aim of making the nation's financial markets more global, free and fair by 2001. This is to be made possible through such means as allowing financial institutions to offer a wider range of products and letting banks, securities firms and insurance companies enter each other's business turf more freely. Regulations concerning commissions and other fees will also be lifted, according to Hashimoto's plan.Mitsuzuka told Clarke that Tokyo will continue efforts to reduce its fiscal deficit, explaining that he hopes the nation can slash the deficit to less than 3 percent of gross domestic product one year or even 1 1/2 years before the 2005 target.With the outstanding balance of government bonds expected to reach 240 trillion yen at the end of March, Japan has become one of the most indebted nations in the industrialized world. Mitsuzuka expressed confidence that by the latter half of fiscal 1997, the nation's economy will be on the path of self-sustaining recovery supported by the private sector.The two ministers also agreed to try to reach a swift, formal agreement over the correction of disparities in Japan's liquor taxation system, which the World Trade Organization has ruled discriminates against imports. Japan has said it would gradually raise the levy on the domestic spirit "shochu" by 1.6 to 2.4 times by October 2001, while reducing the tax on whiskey 58 percent by October 1998.