Conclusion

Abstract

Widespread restructuring in the Japanese banking industry proceeded during the early 2000s in a period reminiscent of the end of the bubble economy when the settlement of non-performing loans (NPLs) was pushed forward at an accelerated pace. However, the Japanese economy has since been depressed severely as a result of long-term deflation. Concurrent changes in social and economic systems have also functioned to add to deflationary pressures. The Japanese banking industry was successful in restoring stability but its future is not necessarily bright. Management of the Japanese banks will be obliged to be more flexible in relation to future changes.