Japan Is Seen Gaining an Edge by Opening Its Capital Markets; Firms Will Likely Operate as 'Financial Services Exporters'
Matthews, Gordon, American Banker
NEW YORK -- The opening of Japan's capital markets to foreign companies will likely be overshadowed by the "emergence of Japanese financial institutions onto the world stage," and Western financial organizations must brace for new Competitors, said a top officer of American Express Co.
"Japanese banks are not bashful in saying they are targeting certain kinds of fee-generating activity on a global basis," said F. Gregory Fitz-Gerald, executive vice president and treasurer of American Express. To respond to this challenge, he warned, "we have to get better" at delivering financial services.
Japan's financial industry has already "amassed tremendous international strength," and its potential is "huge," he said Wednesday at a conference here called "An International Yen: What's Ahead for Asia," sponsored by the Asia Society and the Japan Society.
The meeting focused on the accord last May with the United States in which Japan agreed to internationalize its currency, the yen, by deregulating its highly controlled financial markets. The United States hopes the pact will improve its large trade deficit with Japan, while Japan wants to avert trade protectionism.
Mr. Fitz-Gerald noted that most non-Japanese financial firms have adopted the notion that the liberalization of markets in Japan "means breaking into the Japanese market." But the much larger consequence of the changes may be the emergence of Japanese firms as "exporters of financial services."
Acknowledging the riskiness of drawing historical parallels, the American Express officer compared the yen liberalization agreement to the fabled 1853 "opening of Japan" to foreign commerce at the behest of U.S. Navy Commodore Matthew C. Perry and the "black ships" of his fleet.
High school textbooks in this country, he said, "tell us that a feudal Japanese society was suddenly confronted by the clear technological and military superiority of the foreigners. …