The Tokyo Stock Exchange plans to install a next-generation computer system as early as 2008 that will have stronger backup functions to cope with system failures and to allow higher transaction speed, Taizo Nishimuro, the bourse's chairman and president, said in a recent interview.

The new system will be open-ended to allow the TSE to share the system with stock exchanges in Osaka, Nagoya, Fukuoka and Sapporo, he said.

Currently, Japan's bourses have independent computer systems. Each exchange must develop on its own a system powerful enough to handle a variety of financial products flexibly, given the huge investment costs involved.

"We will set up a mechanism that exchanges (nationwide) can use. (Through) this, we would like to increase Japan's international competitiveness," Nishimuro said.

The new system is also expected to enable the TSE to deal with surging Internet transactions by individuals.

Nishimuro said he will give the highest priority to establishing a stable computer system in view of a recent spate of computer glitches, and put off a plan to list the TSE on the stock market.

"The most important thing is to ensure stable market operations. We should reflect upon our past policy of seeking a stock listing for its own sake," he said.

To speed up efforts to improve the TSE computer system stability, Nishimuro said the new chief information officer post will soon be filled.

"If the TSE cannot stand up to international competition, the foundation on which the Japanese economy stands may sink," he said, adding the TSE will work to up its transmission speed amid intensifying competition with the New York and London stock exchanges as well as the rapidly growing Hong Kong and Singapore bourses.