April, 23, 2010

As momentum grows in the United States and Europe for tighter regulations on banks, opposition is building in Japan.Financial industry leaders and even regulators argue that proposed measures like stronger bank capital requirements and taxes on financial transactions to curtail risk-taking, as well as new rules being debated for Wall Street, are overreactions that threaten to derail the global economic recovery.

But their objections are also rooted in fears that tougher rules would make it harder for Japanese banks to expand and compete worldwide at a time when they must look overseas for growth. That seems unfair, they say, considering Japanese banks engaged in few of the risky practices that set off the crisis.“Japan cannot let this trend become the global standard,” said Hirofumi Gomi, a former Financial Services Agency chief and chairman of the PricewaterhouseCoopers Research Institute in Tokyo.

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