JAPANESE GIVE THE CHOP TO FORMER ALLIES
The close-knit relationship between Japanese corporations and their
main banks is showing signs of collapse. Dealing banks are being sacked
by their foremr dependents in increasing numbers.
The contributing factor behind the startling change to the
framework of Japanese industrial society is financial deregulation.
Japanese business corporations have been gaining access to a broader
range of financial instruments and funding opportunities in the world
capital market. They have also sharpened their skills in treasury
management and improved their efficiency in international cash
management. These have helped to build up large cash surpluses and to
boost corporate profits.
And these profits are not being used for investment in new plant
and equipment, nor being passed on to employees in the form of wage
increases. They are being reinvested in overseas financial instruments
which yield much higher returns than those in the domestic market.
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