The essence of any banking system is a combination of various types of credit institutions and national banks. Each country has its own distinctive features, but at the same time, many states have common signs of building banking systems. Thus, the banking system of Germany, Japan and the United States are usually regarded as different from each other. Each of them has its own characteristics.
The banking system of Japan, despite its youth in comparison with the American and European, is characterized by a fairly high level of development. Banks are assigned the role of an axial structure in all financial and industrial groups, in addition, they also unite some companies around themselves. The role of the state in regulating and controlling the banking sector is quite strong.
The banking system of Japan, which can be called modern, appeared after the Second World War. It is important to remember that it is built according to the American model. In Japan, there are banks that can be safely attributed to the world's leading banks. The most powerful financial-industrial groups, headed by Japanese banks, make huge financial investments in Asia, Western Europe, Australia, and the United States.
The banking system in the market economy of this country plays a big role. It is represented by two links. The first is the Central Bank, which includes a political council, 3 executive auditors, as well as 8 advisers and 3 executive directors. The second link - commercial banks, referring to regional banks, city banks, trust banks, branches of foreign banks and new types of banks. The Central Bank is also called the Bank of Japan, its status and functions were determined by law in 1942. This law was subsequently modernized twice, the last in 1998. By status, the Bank of Japan is a joint stock company. It has a number of functions.
The first is the issue of banknotes. The Central Bank has an unlimited monopoly on issuing banknotes. With the consent of the government, the Ministry of Finance sets the issue. Previously, it forced the bank to constantly hold reserves. But the new legislation no longer puts forward such requirements for the formation of reserves, which allows the Central Bank to promote the balanced development of the Japanese economy by maintaining price stability.
The second function is the implementation of monetary policy. Every six months, the bank is obliged to report to Parliament, using the support of the Minister of Finance, about its monetary policy. But its development and implementation is independent of no institution, that is, the bank does it on its own.
The third function is to ensure the uninterrupted and efficient functioning of the entire settlement system between various credit organizations. The fourth function is monitoring and checking the financial condition and management position of all financial institutions. And the fifth function is control over the credit sphere, as well as ensuring the absolutely uninterrupted functioning of the entire system of settlements and payments by providing loans of limited duration to credit organizations.
Until the 90s, the country of the rising sun was a major global lender. But then the banking system of Japan began to experience the first signs of a crisis. Over the next twenty years, there were many problems associated with bad loans, the cessation of fulfillment of their obligations by some banks, and a liquidity crisis. In addition, the Japanese economy received a considerable blow as a result of numerous, severe natural disasters.
Having understood what the banking system of Japan is, we can safely say that the change in economic policy in this country has always been carried out carefully and smoothly. And this experience deserves to be used.