A package of four laws for sweeping financial reform was enacted Friday at a plenary session of the Upper House.
The "Big Bang" package, supported by most of the Diet forces but not by the Japanese Communist Party, will drastically ease regulations in the banking, securities and insurance sectors. Most of the measures will take effect Dec. 1.
This is the second in a series of reform steps under the Big Bang initiative to remove all financial market regulations by 2001. The first was foreign exchange liberalization, which took effect April 1.
Two of the bills are designed to revise relevant laws, including the Securities and Exchange Law and the Banking Law, so as to liberalize brokerage commissions on stocks by the end of 1999 and permit banks, securities houses and insurance companies to enter each other's business domains by 2001.
Most of the reforms under the legal revisions, which also include the removal of restrictions on the formation of financial subsidiaries by banks and brokerages, will take effect in December.
The two other bills are aimed at permitting the establishment of special purpose companies by financial institutions to dispose of nonperforming credits and at preventing a chain of bankruptcies through prompt settlement of derivatives trading positions left by collapsed institutions.
Matsunaga said he expects financial institutions to be "innovative," recognize their social responsibilities and provide consumers with attractive services and products "to satisfy their diverse needs."