Globalization and the Politics of Institutional Reform in Japan
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Globalization and the Politics of Institutional Reform in Japan

Motoshi Suzuki

Globalization and the Politics of Institutional Reform in Japan illuminates Japan’s contemporary and historical struggle to adjust policy and the institutional architecture of government to an evolving global order. This focused and scholarly study identifies that key to this difficulty is a structural tendency towards central political command, which reduces the country’s capacity to follow a more subtle allocation of authority that ensures political leadership remains robust and non-dictatorial. The author argues that it is essential for a globalizing state to incorporate opposition parties and transgovernmental networks into policy-making processes. Providing an in-depth analysis of the theories of institutional change, this book introduces readers to a wealth of perspectives and counterarguments concerning analysis of political decision-making and policy adjustment on both the national and international scale.
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Chapter 8: Crisis politics for banking regulation reform

Motoshi Suzuki

Extract

This chapter focuses on the financial core of the Japanese-style coordinated market economy (CME) – the main bank system and the related public policy domain of banking regulation. It has undergone adaptation to the neoliberal international financial order that emerged in the late 1980s. The order is based in part on the Basel Capital Adequacy Accord that emphasizes solid capital foundations for commercial banks and a rule-based supervisory regime. The accord was expected to improve the Japanese regulatory regime in pursuit of efficiency and trustworthiness of the Japanese banking system. Initially, it was widely anticipated that, using Basel as a learning step, Japan could adjust its non-liberal banking system to the neoliberal financial order through regulatory adaptation (Himino, 2005). The adjustment was needed for banks to be able to compete squarely with their US and European counterparts, without upsetting the existing financial core of the Japanese-style CME. In addition, the banks’ new practice would generate the complementary effect of improving their client firms’ management through the main bank system and the related oversight function.

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