A New Financial Market Structure for East Asia
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A New Financial Market Structure for East Asia

Edited by Yung Chul Park, Takatoshi Ito and Yunjong Wang

This book contends that the East Asian financial constitution lacks an appropriate infrastructure, resulting in inefficient allocation of high savings and an over-inflated short-term debt market. It goes on to point out that despite high savings, East Asia’s dependency on financial centers outside the region is also relatively high, and that there is no strong region-wide network to connect various financial centers in East Asia.
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Chapter 7: Tokyo Financial Market as a Financial Center in East Asia

Eiji Ogawa


7. Tokyo financial market as a financial center in East Asia Eiji Ogawa 1. INTRODUCTION Our experience of the Asian currency and financial crises in 1997 teaches us that it is important for East Asian countries to make direct linkages between plenty of savings and prospective investment chances within the East Asian region and to pool liquidity of the financial markets in East Asian countries. For this purpose, East Asian countries should create and develop regional bond markets in the East Asian region as well as local bond markets in each of East Asian countries. Especially for regional bond markets, current international financial centers in East Asia are expected to activate capital and money flows within the East Asian region. Moreover, cooperation among the international financial centers in the East Asian region would help to develop the regional bond markets and, in turn, make direct linkages between savings and investments within the East Asian region. The Tokyo financial market is expected to play a central role as a regional financial center in developing regional bond markets. The Tokyo financial market was said to be one of the three major international financial centers in the world economy because it could compete with London and New York financial centers. However, it is difficult to deny that the Tokyo financial market has seen its position decline not only in quantitative terms but also in qualitative terms in recent years. This chapter considers the current position of the Tokyo financial market among the...

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