The Finance Ministry has launched a study group to initiate discussions on drafting wide-reaching financial services legislation.
The group, which is not an official advisory body, includes academics and representatives of 11 other ministries and agencies. Ministry officials said it would talk about the legal framework that will become necessary after the government's current financial deregulation initiative is implemented.
The Japanese "Big Bang," which is expected to be completed by 2001, will enable financial institutions to offer a wider range of services and spur the development of new financial products. On the other hand, enhanced competition could also lead to more financial failures and the need to foster a greater sense of self-responsibility on the part of consumers.
In such an environment, a law that governs financial bodies across the board is more preferable in terms of consumer protection than existing laws, which cover individual financial sectors. While the group, chaired by Shoichi Royama, a professor at Osaka University, is not expected to draft an outline for such legislation right away, its deliberations are expected to form the backbone of the formation of new rules in a liberalized financial market.