The Government and the Financial System: an Overview
Public Policy Review, 2006, Vol.2, No.1
This paper surveys the relationship between the government and the financial system in Japan, mainly from the viewpoint of financial stocks, to gain an overall perspective and identify where any problems lie. During this decade, it seems that the relationship between the government and the financial system in Japan has changed significantly. The government has generally become more deeply involved in the financial system. As a result it is no exaggeration to say that current Japanese financial system has become a financial system of the government, by the government, for the government. This was for the most part, promoted by the fact that there occurred a huge redistribution of wealth during the realignment process after the bursting of the bubble economy. Considering such circumstances, the aspects of of the government, by the government, and for the government will be surveyed in turn. Furthermore, postal system privatization will be discussed in terms of public debt management. Lastly, reference will be made to the possible problems accompanying the change in trend of investment-savings balances.