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Evolution of the Main Bank System in Japan

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The Structure of the Japanese Economy

Part of the book series: Studies in the Modern Japanese Economy ((SMJE))

Abstract

In Japan, the largest provider of bank loans to a firm is usually identified as the firm’s main bank. A main bank and its client are typically linked in several ways. For instance, the main bank provides cash management and other financial services for the firm, is often a major shareholder, and sometimes sends its employees to serve as directors of the firm. The main bank is expected to be responsible for monitoring the firm and, if the firm gets into trouble, the main bank often intervenes in the firm’s management and tries to rescue it. This set of ties between banks and firms is called the main bank system.

The first draft of this chapter was written while the author was a visiting scholar at the Centre for Japanese Economic Studies at Macquarie University, Sydney. I thank the Centre for its support and hospitality. I also thank Anil Kashyap, Mitsuaki Okabe and Hugh Patrick for helpful comments.

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Authors
  1. Takeo Hoshi
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Editors and Affiliations

  1. Faculty of Policy Management, Keio University, Japan

    Mitsuaki Okabe (Professor) (Professor)

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© 1995 Mitsuaki Okabe

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Hoshi, T. (1995). Evolution of the Main Bank System in Japan. In: Okabe, M. (eds) The Structure of the Japanese Economy. Studies in the Modern Japanese Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-23721-0_11

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