＜概要/Course Content Summary＞
Throughout the course of The Financial System in Japan, you will learn about evolution of Japan’s financial market and its backgrounds in the post-Meiji era, the present and the future based on the instructor’s lectures and student discussions. In Part One, we will discuss the development of the Japanese financial system chronologically from Meiji to the 1980s, mainly focusing on how its “Japaneseness” was created. Based on the knowledge gained from Part One, we will take an overall view of current issues in Part Two by sector, covering imminent issues associated with Japan’s stagnation and linkages between Japan and the world. In Part Two, students will form a policy commission in each sector and have chances to present their recommendations in groups.
＜到達目標/Goals,Aims＞
The objective of this course is to understand the development process, the current overview and the future of Japanese financial system by closely investigating its historic flow (vertical view) and its relations with the world economy (horizontal view). Stronger foci will be on causal relations of economic/financial events and their linkages to non-economic factors (i.e., social movement, geopolitics). Students whose career interests are related to international business/finance, public services, foreign services and economic development will find the course useful.
＜授業計画/Schedule＞
（実施回/
Week）
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（内容/
Contents）
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（授業時間外の学習/
Assignments）
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（実施回/ Week）
Part One: Japan’s financial system; then and now
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（実施回/ Week）
Week 1
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（内容/ Contents）
Introduction
Introduction, course orientation and a birds-eye view of the financial system of contemporary Japan
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（授業時間外の学習/ Assignments）
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（実施回/ Week）
Week 2
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（内容/ Contents）
Contemporary finance at dawn
How was the modern financial system built?
-Legacy from the pre-Meiji era
-The Iwakura Mission and external factors
-Direct finance and banking intermediaries 3.
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapters 1 & 2
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（実施回/ Week）
Week 3
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（内容/ Contents）
Inter-war period
What were the causes of the Showa / Great Depression?
-The banking crisis in the 1920s
-Gold standard system and the Great Depression
-Fallacy of the “yen-bloc”
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapters 2 & 3
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（実施回/ Week）
Week 4
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（内容/ Contents）
“The 1937 system”, WWII and post-WWII reconstruction
How did the system change along with the wars?
-Controlled banking
-Zaibatsu dissolution
-Reconstruction finance and priority production system
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapter 3
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（実施回/ Week）
Week 5
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（内容/ Contents）
The main bank system and keiretsu
Was the system efficient at the time of rapid growth?
-“Japan Inc.” and the convoy system
-Regulations to depositors, borrowers and lenders
-Bailouts
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapters 4 & 5
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（実施回/ Week）
Week 6
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（内容/ Contents）
Deregulation and the bubble trouble
Was it truly a conspiracy of the American gaiatsu?
-Globalization and deregulation
-Asset finance and the bubble
-Bubble economy; here and there
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapter 7
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（実施回/ Week）
Week 7
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（内容/ Contents）
Jusen, “Japan premium” and crisis
Weren’t the reforms drastic enough?
-Big Bang and limited market opening to foreigners
-Series of financial sector bankruptcies and non-performing loans
-Asian Financial Crisis
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapter 8
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（実施回/ Week）
Week 8
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（内容/ Contents）
Lost in excess money supply
Where is Japan’s financial industry heading to?
-Zero-or-negative interest rates
-Decreasing financial needs
-Decreasing workplace popularity
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（授業時間外の学習/ Assignments）
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（実施回/ Week）
Week 9
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（内容/ Contents）
Mid-term evaluation
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（授業時間外の学習/ Assignments）
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（実施回/ Week）
Part Two: Japanese financial sectors; now and their futures
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（実施回/ Week）
Week 10
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（内容/ Contents）
Banking
Pros and cons of the prevalent main bank system
-Presentation by the Banking Commission
-BIS and capital adequacy
-The luck of not being innovative
-Chances and limits of international banking
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（授業時間外の学習/ Assignments）
Hoshi & Kashyap Chapters 6 & 9
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（実施回/ Week）
Week 11
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（内容/ Contents）
Security firms / investment banks
On what should they focus in the aftermath of the global crisis?
-Presentation by the Security Commission
-Capital markets
-Mega mergers
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（授業時間外の学習/ Assignments）
Flath Chapter 13
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（実施回/ Week）
Week 12
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（内容/ Contents）
Insurance
Are Japanese people over-insured?
-Presentation by the Insurance Commission
-Life, non-life and the third sector
-Gaiatsu and naiatsu (external and internal pressures)
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（授業時間外の学習/ Assignments）
Flath Chapter 13
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（実施回/ Week）
Week 13
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（内容/ Contents）
Japan Post, Agricultural Coop and Kyosai
Vested interests?
-Presentation by the Postal Reform Commission
-Legacies of the Koizumi reform and pushbacks
-Disparity and fair competition questions
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（授業時間外の学習/ Assignments）
Flath Chapter 13
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（実施回/ Week）
Week 14
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（内容/ Contents）
Bank of Japan
Is deflation the BoJ’s fault?
-Presentation by the Monetary Policy Commission
-Very basics of monetary policy
-What the BoJ can and cannot do
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（授業時間外の学習/ Assignments）
Handout
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（実施回/ Week）
Week 15
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（内容/ Contents）
Public and private financial systems (Final Paper Submission Deadline)
Will Japan go bankrupt?
-Cozy relations among households, businesses, finance sectors and government
-Impacts from the crisis in the Euro and other areas.
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（授業時間外の学習/ Assignments）
Flath Chapter 10
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Course Requirements and Assignments
a) Readings and Participation:
Reading assignments (textbooks and handouts) will be provided every session and students are asked to come to class prepared to discuss the contents. Students are strongly encouraged to participate in discussions.
b) Mid-term evaluation:
You will take an in-class mid-term exam, arguing the backgrounds of critical factors and incidents of Japan’s contemporary financial system.
c) Presentation:
At the second half of the course, students will form a policy commission in each sector (banking, securities, insurance, Japan Post privatization and central banking) and have chances to present their recommendations in groups. Students are asked to investigate pertinent issues in each sector and provide policy recommendations to fight against them. Your presentation must be done in 20 minutes so that Q&As and related lectures can follow.
c) Final Paper:
Students will submit a final paper (about six-pages long, double space) at the end of the course that is related to the coursework. Paper topic is free to choose but you need a prior approval from the instructor. Other readings may also be suggested according to your topic.
＜成績評価基準/Evaluation Criteria＞
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Report submission (final paper)
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40%
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You need a prior approval from the instructor about the topic.
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Contributions to the class including presentations, class discussions
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30%
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Just coming to the class does not count.
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Examination (mid-term)
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30%
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In-class, essay-based.
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Classroom Policies
・There is no prerequisite for this course. Having basic economics background is a plus, but not a must. If you have not studied basic economics, you are strongly recommended to self-study to make the coursework beneficial for yourself.
・It is impossible to learn and understand only at the classroom. Students need extensive readings in the required, optional and other materials.
＜テキスト/Textbook＞
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Hoshi, Takeo & Kashyap, Anil K
, Corporate Financing and Governance in Japan: The Road to the Future
.
(Cambridge (MA), MIT, 2001)
.
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Flath, David
, The Japanese Economy
,
Third Edition
.
(Oxford, Oxford University Press, 2014)
.
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＜参考文献/Reference Book＞
＜備考/Remarks＞
Instructor: Ryohei NAKAGAWA
Email: r_nakagawa@gmail.com
Note: This syllabus will be subject to changes and/or revisions
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