The upcoming year will be a critical one for domestic banking as the industry decides on a new grand design for Japanese financial institutions operating in the global markets, the head of the nation’s banking community said April 15.
Sakura Bank President Shunsaku Hashimoto, outgoing chairman of the Japan Federation of Bankers Associations, said upon completing his one-year term as the industry’s spokesman that it will be a year in which drastic measures are called for to restore public trust in banks and to better match global financial standards. His stint began last April with the task of cleaning up the “jusen” housing loan corporation fiasco, in which opposition to the use of public funds for the liquidation of housing loan lenders forced banks to put up more money to finance a special liquidation fund.
“While steady progress has been made in restoring trust to the banking system, there are still issues that need to be solved, and more efforts must be made in this area,” he said. He also praised the proposed “Big Bang” of financial deregulation outlined by Prime Minister Ryutaro Hashimoto last fall, calling it a “major turning point” in efforts to bring the industry up to global standards.
Meanwhile, he said the economy remained on the path to recovery, and that while a dip is predicted in the April-June period, due to the rise in the consumption tax, growth will pick up again in the latter half of fiscal 1997.
On foreign exchange rates, he said it was not likely that the yen would depreciate further in the future against the dollar, given current economic fundamentals.