Subject The article reviews the main stages of regional banks development and specifics of government regulation of the Japanese banking system from the second half of the 19th century to the present days. Objectives The objective is to analyze the transformation of different forms of financial intermediation at the regional level and the contribution of regional banks to economic development of Japan. Methods The study draws upon foreign historical surveys and economic studies on Japanese financial system development in general, and regional financial institutions in particular. Results Regional banks in Japan were established based on international experience (Germany, United States, other Western countries) and traditional forms of financial intermediation of Japan. During the financial system reform, government authorities responsible for financial sector regulation and supervision recognized the role of regional banks in the economic system and supported them through certain measures of the national policy. Under liberalization of Japanese financial system, regional banks faced tough competition from larger financial institutions. However, the knowledge of local market specifics and long-term contacts with clients are an important competitive advantage, which allows regional banks to expand their services. Conclusions The Japanese experience in financial system development speaks for the importance of government regulation in terms of support to regional financial institutions and the need for consideration of regional specifics and national traditions in the sphere of financial intermediation.
Keywords: regional bank, Japan, banking system
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