ABSTRACT

Seven years after the stock market crash of 1989-1990, Prime Minister Hashimoto announced plans for a Japanese style financial market ‘Big Bang’1 in order to stem the growing irrelevancy of Tokyo as a financial center. Indeed, between 1990 and 1995, Tokyo’s share of stock market trading volume had fallen from 41% of the world total to just 17%. Initially the PM’s plans centered on infrastructure investment, promotion campaigns and financial market deregulation, but it became progressively more evident that the real problem was loss of interest in Japanese companies due to poor performance, opacity and financial crises that had not been adequately addressed. That is, Britain’s big bang had succeeded not simply due to improvements in infrastructure, information and deregulation, but also because these changes occurred in the context of a system of transparent accounting rules and improving economic conditions.