The Research Forum for Revitalization of Financial Intermediation in Domestic Economy (“the Research Forum”) is sponsored by Nomura Research Institute, and its standing members include experienced policymakers and practitioners from financial institutions and the financial markets. Its objective is to identify problems with financial intermediation by Japanese commercial banks and to investigate favorable avenues for change in an evolving financial and technological environment. Its first phase of activity lasted from the summer of 2015 until the spring of 2017, and it is now preparing for a second phase.
The Research Forum traces its roots to the Banking Panel, which was launched in 2012. From the outset, Japan’s prolonged period of low growth and low interest rates posed major obstacles to financial intermediation by commercial banks. The Banking Panel examined future avenues for financial intermediation in Japan by discussing various views of the situation and examining the state of commercial banking in Southeast Asia, where leading financial institutions were expanding significantly.
Since its first meeting in 2015, the Research Forum has acknowledged both the challenging financial and economic environment and the structural problems, such as efficiency, that characterize commercial banking in Japan. But at the same time, it seeks to discuss the role that regional financial institutions can sustainably fulfill, with a focus on revitalizing the local economies that are essential for the revival of Japan’s economy. These discussions have been conducted both through meetings of standing members and also via informal exchanges with policymakers and regional financial institution executives. The results of these discussions were published in a report in March 2017.
In Japan, the environment has subsequently grown even less hospitable to financial intermediation by commercial banks. In China and the West, meanwhile, deregulation and rapid advances in IT have led to major changes in financial intermediation business models and participants. The Secretariat is now preparing to conduct overseas case studies and organize exchanges with scholars on a number of topics, including the longer-term implications of these developments for financial intermediation in Japan and the question of how to maintain an efficient but stable financial system in this new environment.
Traditionally, it was mainly the Japanese policy authorities that organized discussions regarding financial intermediation and related policy. The Research Forum seeks to play a role in those discussions as a private-sector body. It also hopes to make a unique contribution via its cooperation with the Financial Markets Panel (as it did in the discussion of financial intermediation as a transmission mechanism for monetary policy). While its basic approach is to broadly disseminate the results of its discussions to policymakers, scholars, and practitioners around the world, it is also cognizant of the need for discretion in the handling of potentially sensitive case studies and issues related to financial system stability.