Coming to terms with Big Bang

With Japan's financial deregulation gathering pace - and foreign players emerging as the clear winners - Japanese institutions have been slow to formulate defence strategies. Some see their salvation in growth areas such as investment banking and asset management. But as Jack Lowenstein reports, their real future may lie in linking up with outsiders. And foreign acquisition of Japanese firms may not be far off.

Foreign banks are expected to be big winners from the reforms sweeping Japan’s financial sector. This is not least because they are reckoned to be more adaptable than Japanese firms because of their experience of other deregulated markets and more flexible cost structures. “It is very easy for foreign financial institutions to make money in Japan,” says UBS Securities senior analyst Yukiko Ohara. “They are much more focused on return ratios, on getting value from unprofitable clients, and they have the technology to survey and maximize their profitability.

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