FTC holding firm proposals tied to zaibatsu fear

Proposed guidelines for holding companies under a revised Antimonopoly Law are too rigid to fit the times, members of an advisory study group to the finance minister said Feb. 17.

A subcommittee of the Financial System Research Council said that an excessive fear of a resurgence of prewar zaibatsu conglomerates has permeated the revisions compiled by the Fair Trade Commission for submission to the current Diet session. The FTC proposes forbidding the formation of three types of holding firms and limiting their groupwide assets to 20 trillion yen as the comprehensive ban on holding firms is lifted.

For financial holding companies, the FTC proposes banning those that bring ordinary companies and major financial institutions — namely city banks — under one roof, and those that bring a large number of big banks, securities firms and life insurers together. But many subcommittee members said the guidelines put too much emphasis on preventing the rebirth of the autocratic conglomerates, adding that concentration did not necessarily pose a problem in terms of securing healthy competition, according to subcommittee head Keimei Kaizuka, a professor of law at Chuo University.

Kaizuka added that since firms — especially financial institutions — compete in global markets, it would be too simplistic to keep domestic market share as a benchmark. The subcommittee also noted that other aspects, such as revisions to current taxation laws, must be considered before holding companies could be established so that a solid infrastructure is in place.