U.S. BANKER URGES FASTER JAPANESE LIBERALISATION
Japan should step up the pace of its
financial liberalisation if it wants to become a world
financial centre equal to New York or London, a leading U.S
banker said.
    "For Tokyo to become the third link in an international
capital markets triangle, it will need to create an environment
more hospitable to international finance than currently exists,"
Robert Binney, senior vice-president of Chase Manhattan Bank
N.A., Told a group of Japanese members of parliament and
financial leaders.
    Binney said Japan must liberalise its financial markets not
just to attract more jobs, capital and taxable income, but also
to recycle effectively its vast trade surpluses to help counter
growing protectionism in the United States.
    He called on Japan to remove all controls on deposit
interest rates soon and to remove obstacles to the growth of
its offshore market. He also said it should fully deregulate
its short-term money markets, develop comprehensive futures
markets, further open the Tokyo Stock Exchange to foreign
membership and remove fixed rate brokerage commissions.
    Binney also urged Japan to abolish Article 25 of its
Securities and Exchange Law which, like the U.S. Glass Steagall
Act, separates commercial from investment banking.
    At the same meeting Goldman Sachs (Japan) Corp president
Eugene Atkinson urged Japan to fully de-regulate short-term
interest rates, introduce commercial paper and open long-term
government bond markets to an auction system.
    He said Japan should allow securities firms to participate
in foreign exchange business and develop over-the-counter stock
options and futures. Short-selling of Japanese government cash
bonds was a vital hedging mechanism, he added.
    The group of some 60 Japanese legislators and financial
leaders which Atkinson and Binney addressed was recently formed
to study ways in which Japan should promote liberalisation of
its financial markets.
    "We should not leave such matters solely to government
bureaucrats," Masao Hori, Chairman of the lower house finance
committee, told the group.
 REUTER
