While the business and financial communities are pleased that the ruling coalition finally reached an agreement on lifting a 50-year-old ban on holding companies, they say they have yet to get all they want.

Expectations are running high that the newly allowed format will bring momentum to the ongoing but somewhat tardy structural reform of the nation’s economy. For the financial sector, where sweeping reform is urgently needed, liberalization of holding companies could bring a “revolution,” said Makoto Utsumi, a professor at Keio University and a former vice finance minister for international affairs.

Since the early 1980s, Japan has been pushing forward deregulation of its financial sector and capital markets, but the nation is now reaching “rock bottom from which it’s hard to rise,” he said. “But by allowing holding companies, with proper firewalls, there can be much more progress in the interpenetration of business sectors,” he said.

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