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The Financial Services Agency is set to allow banks to enter the insurance market through subsidiaries on Oct. 1, completing Japan’s 7-year-old “Big Bang” financial deregulation drive.

“(The decision) will finish the reform of (Japan’s) financial system,” FSA Commissioner Masaharu Hino said at a press conference Monday.

Japan kicked off the deregulation drive in April 1993 with an eye toward removing the barriers that keep banks, securities houses and insurance companies from entering each other’s fields.

The initial deregulatory step, taken in April 1993, removed the barriers between banks and securities houses. Insurers and brokerages were given the green light to enter each other’s markets in December 1998.

But the final phase of deregulation has stalled due to strong opposition from insurers, who fear the advance of banks into their domain. The last phase took only a half-step forward in October 1999, when insurers were given the right to own banking subsidiaries, while banks were restricted to taking over collapsed insurers.

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