In this book Takeo Hoshi and Anil Kashyap examine the history of
the Japanese financial system, from its nineteenth-century
beginnings through the collapse of the 1990s that concluded with
sweeping reforms. Combining financial theory with new data and
original case studies, they show why the Japanese financial
system developed as it did and how its history affects its
ongoing evolution. The authors describe four major periods
within Japan's financial history and speculate on the fifth,
into which Japan is now moving. Throughout, they focus on four
questions: How do households hold their savings? How is business
financing provided? What range of services do banks provide? And
what is the nature and extent of bank involvement in the
management of firms? The answers provide a framework for
analyzing the history of the past 150 years, as well as
implications of the just-completed reforms known as the
"Japanese Big Bang." Hoshi and Kashyap show that the largely
successful era of bank dominance in postwar Japan is