Shooting the messenger
Japanese regulators have banned the derivatives arm of Credit Suisse First Boston. They should have attacked those dealing with it instead
LET it be conceded from the outset: Japan's new financial regulator, the Financial Supervisory Agency (FSA), is a huge improvement on its predecessor. A cynic might say that this is not hard, since the predecessor was the finance ministry, which was irredeemably awful in all forms of regulation. As the finance ministry saw it, regulation meant control over every facet of Japan's financial markets. There were few rules, only nods and winks from the ministry, a practice euphemistically known as “administrative guidance”. Thanks in good measure to the ministry's dead hand, Japan's financial system has failed to recover from the collapse of equity and property markets in the early 1990s.
This article appeared in the Leaders section of the print edition under the headline “Shooting the messenger”
From the August 7th 1999 edition
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