14

Jan

Globalization of Regional Financing in Japan

Challenges in regional financing and the first step toward a solution Changes of regional banks due to technological innovations Technological innovation has been evolving, and the industrial structure and environment of various tasks have changed rapidly in recent years. The local financial industry has also been affected by the changes, and the management styles of regional banks have greatly changed. The number of startup companies who have received investment from private venture capital firms has increased while at the same time the number of companies receiving investment from regional banks has decreased. The reasons for the decline include a lack of knowledge within the banks to support the companies, and banks are not investors with attractive networks, which financial institutions on community-based might be in a very critical situation. In addition, regional banks are trying to survive by shifting investment into municipal bonds because the Bank of Japan is presenting a negative interest rate policy, and the intense interest rate competition among banks to secure financing receivers has reduced the profitability of lending, The market reform of Tokyo Stock Exchange forces the survival crisis on regional banks Regional banks are inching toward a crisis, but the trigger came from the market reform proposals on the first section of Tokyo Stock Exchange. The background of such reform propositions is that more than 2.000 companies are listed on the first section of Tokyo Stock Exchange, and it is difficult for investors to distinguish strengths within the market. A recommendation for setting the condition of “market capitalization of 25 billion Japanese yen or more for listing” has been reported in order to improve the market reform proposal. The banking industry is concerned about […]