Japan Post Bank: Problematic Issues
- Japan Post Bank: Problematic Issues
- Lincoln, Edward J.
- Center on Japanese Economy and Business
- Persistent URL:
- Center on Japanese Economy and Business Working Papers
- Part Number:
- Geographic Area:
- Center on Japanese Economy and Business, Graduate School of Business, Columbia University
- Publisher Location:
- New York
- Japan, like many countries, has long offered savings deposits through the postal system. That system has undergone some reform over the past dozen years, and beginning in 2007 the system was to undergo privatization, with Japan Post Bank eventually becoming an independent entity. A new law passed in 2012 has stalled the privatization process. Regardless of how the issue of privatization plays out, the existence of a savings bank embedded within the postal system raises a number of troubling issues. This essay addresses five of those problems: a level playing field, market power, cross subsidization, social policy, and risk or inefficiency. These issues concern the fairness of competition within the banking industry, future financial stability of the Japan Post Bank, and broader economic inefficiency within the Japanese economy. This essay argues that government ownership of Japan Post Bank is unjustified on economic or social grounds. Complete privatization should resolve some of the problems, especially that of a level playing field. But issues of economic inefficiency and future financial stability could remain even after privatization.
Banks and banking
- Item views
text | xml
- Suggested Citation:
- Edward J. Lincoln, 2013, Japan Post Bank: Problematic Issues, Columbia University Academic Commons, https://doi.org/10.7916/D8MK6N86.