The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Japan wrestles with guarantor role

Eiji Hirano, assistant governor of the Bank of Japan, spoke to Euromoney's Nick Parsons about Japan's views on a broadening and deepening of Asia's bond markets. He tempered his enthusiasm with an emphasis on the need for simultaneous development of the region's banking system.

Jeiji Hirano, assistant governor of
the Bank of Japan

Why is Japan supporting the development of an Asian bond market? Our experience of high growth in Japan was that financial intermediation was carried out largely by the banks and the capital markets were undeveloped. Corporates relied on bank borrowing as a source of funds but still we experienced high growth.

At the early stage of development, banking is very important. And banking is very important in Asia. But nonetheless a deep and liquid bond market is important given the very different environment facing this region compared with Japan in the high-growth 1960s and 1970s.

There is rising demand for different asset classes, backed by rising middle-class incomes, which has led to calls for a diversity of asset classes and thinking on a portfolio basis. But I should caution that it will take quite a long time for the region to see deep and liquid markets because there are so many impediments.

There is inconsistent regulation, no cross-border investment, the overall credit culture is undeveloped, a lot of things from tax to settlement are needed.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree