Deregulation of the Japanese Markets - Opportunities for the Edinburgh Investment Community

Abstract

The proposed deregeulation of the Japanese financial markets, first announced in November 1996 is intended to make the financial system more competitive and to make better use of the country's Y1200 trillion of personal savings. The potential for new business is hard for foreign financial institutions to ignore. Many foreign institutions are therefore seeking to enhance their presence in the Japanese market prior to the reforms taking place. Edinburgh has a long and distinguished history as a fund management centre, but in recent years has increasingly seen its clients move their business to London, a trend that has led to it slipping down the European league tables of top financial centres. Japan's "Big Bang" could be a timely opportunity for Edinburgh to seek to replace some of the funds lost to London through specific targeting of the Japanese market. This paper examines the reactions and opinions of Edinburgh's fund managers in relation to the Japanese government proposals. It concludes that entering into tie-ups with Japanese fund managers, are the preferred options for Edinburgh firms seeking to enter Japanese investment markets. A more pro-active and united approach by the Edinburgh financial community is required to ensure it reaps maximum benefit from the unique opportunities opening up in Japan.