Japan: Separation of Banking and Securities Business and Conflicts of Interest

Abstract

Japan introduced a new piece of legislation in 1992, designed to reform the financial system, the main feature of which was to ease the strict separation imposed on banks and securities companies under Article 65 of the Securities and Exchange Law of 1948 (SEL). The Japanese Government identified as specific problems that would have to be faced in allowing banks to enter into securities business and securities companies in turn to enter into banking, sound management, conflicts of interest and fair competition. However, the fierce opposition from the securities industry to the banks being permitted to enter their lucrative business had more to do with loss of business than issues of investor protection.

Citation

Nakajima, C. (1996), "Japan: Separation of Banking and Securities Business and Conflicts of Interest", Journal of Financial Crime, Vol. 3 No. 3, pp. 299-303. https://doi.org/10.1108/eb025727