Banking

Japan’s ambition to enhance its role as an international financial centre hinges on its ability to adapt its regulatory systems to the evolving needs of global finance. However, rules rooted in legacy concerns, such as the firewall regulations limiting joined-up banking and securities activities, continue to restrict operational flexibility. Similarly, while discussions are underway on syndicated lending and stablecoin infrastructure, the policy and regulatory responses remain either pending or incomplete.

The Japanese authorities have taken some commendable steps, including the establishment of working groups and forums to explore forward-looking reforms. Yet, the pace and scope of these efforts need to accelerate. Ensuring a level playing field for all market participants—foreign and domestic—requires coordinated adjustments across multiple legal frameworks, including the Banking Act and the Money Lending Act. Without such systemic changes, Japan risks limiting both its competitiveness and the attractiveness of its financial sector to international institutions.

The issues raised in this document reflect practical experiences and persistent concerns from the foreign banking community. They are presented alongside specific recommendations aimed at informing the ongoing dialogue between industry stakeholders and Japanese regulators, with the shared objective of promoting a more open, efficient, and globally integrated financial system.