Japanese Financial System and Monetary Policy: A Descriptive Review

摘要

The article discusses the evolution of the financial system in Japan and its consequences for the monetary policy implemented by the Bank of Japan. Firstly, the Japanese financial institutions and markets are set out with emphasis on depository institutions and on interbank and open money markets because of their relevance for monetary policy. Secondly, it describes the progress of financial innovation and liberalization in Japan which took off in the late seventies and early eighties. Thirdly, the objectives, indicators and instruments of monetary policy by the Bank are analyzed with special reference to the transmission mechanism of monetary policy. A distinction is made between the traditional, new and modern monetary policy.