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The Background of Hometown Investment Trust Funds

  • Naoyuki Yoshino
Chapter

Abstract

This chapter will, first of all, describe how the flow of funds in Japan functions. Second, it explains how Hometown Investment Trust (HIT) funds can fund businesses that are likely to grow in future and are capable of making a social contribution, but entail risks. HIT funds have recently begun to grow, and we will make the case for the urgent need to foster such funds. There are two main reasons why this is important. First, as BIS capital adequacy requirements become more stringent worldwide, banks find it more difficult to provide funding to high-risk businesses and projects. Second, Japan’s public finances are in dire straits. Local businesses outside the main urban centres used to be supported by subsidies from the centre to local regions in the form of national tax revenues allocated to local governments, national treasury disbursements, and government loan and investment funds. Under today’s expanding fiscal deficits, however, issuance of deficit-financing bonds to provide for local regions has reached a limit, and the need to use private-sector funds to finance regional projects has become urgent (Yoshino and Mizoguchi, Financial policy review, Ministry of Finance of Japan, 2013; McNelis and Yoshino, Advs Complex Syst 15:1250057, 2012).

The second half of this chapter will describe the flow of funds in Asia.  Chapter 5 of this book will discuss concrete examples in Asia, where the financial systems also rely heavily on indirect financing via banks, so that the supply of funds to risk sectors is very likely to taper off. It is necessary to create mechanisms to supply various kinds of funds, including HIT funds that finance new corporations, businesses and environmental programs.

Keywords

Venture Capital Pension Fund Investment Fund Life Insurance Company Capital Adequacy Ratio 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. McNelis P, Yoshino N (2012) Macroeconomic volatility under high accumulation of government debt: lessons from Japan. Adv Complex Syst 15(Suppl 2):1250057. doi: 10.1142/S0219525912500579 Google Scholar
  2. Revankar N, Yoshino N (2008) An empirical analysis of Japanese banking behavior in a period of financial instability. Keio Econ Stud 45(1):1–15Google Scholar
  3. Yoshino N (2010) Financing transport infrastructure development in Southeast Asia. OECD, Southeast Asian economic outlook, 2010 November. OECD, Paris (Chapter 6)Google Scholar
  4. Yoshino N (2012) Global imbalance and the development of capital flows among Asian countries. OECD J Financ Market Trends 1:81–112CrossRefGoogle Scholar
  5. Yoshino N, Hirano T (2011) Pro-cyclicality of the Basel capital requirement ratio and its impact on banks. Asian Econ Pap 10(2):22–36CrossRefGoogle Scholar
  6. Yoshino N, Mizoguchi T (2013) Changes in the flow of funds and the fiscal policy rules needed for fiscal stabilization. Public policy review 6(1), Ministry of Finance, JapanGoogle Scholar

Copyright information

© Springer Japan 2013

Authors and Affiliations

  1. 1.Keio UniversityTokyoJapan

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