Drastic reforms to achieve complete freedom for players, prices and products in the nation's financial markets should be implemented by April, according to a report released June 4 by the Ministry of International Trade and Industry.
The report, drafted by a subcommittee of the Industrial Structural Council, an advisory panel to the MITI chief, came as other separate advisory panels to the finance minister try to draw up proposals for proposed financial reform. Although the issue is primarily the jurisdiction of the Finance Ministry, a MITI official said that the so-called "Big Bang" reform is of great concern to all the nation's industries.
Specifically, the report calls for removing fire walls separating different sectors of financial businesses, abolishing the licensing system and liberalizing entry to such areas as securities, trusts, investment trusts, and investment consulting businesses. As a way to enhance usability, the government should lift restrictions on multiple-purpose securities accounts, the report says.
The liberalization of brokerages for securities transactions should be implemented not gradually, but fully by April to increase price competition, it says. The government's approval system for new products in the insurance and securities investment trust businesses should be abolished to encourage the introduction of a wide variety of products, according to the report.
The report says that an equally drastic reform should be undertaken for governmental financial institutions, noting that it will be indispensable for maximizing the effect of the reforms on the private sector. It says that the role of governmental financial institutions should be limited to areas where the government sees a need and private financial institutions have no service.
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