The Ministry of Finance's Power and Bank of Japan Origins
Hans explains the MOF's broad remit, the BOJ's subordinate status, and the emergence of window guidance as credit allocation tool.
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Japan is a country with a deep history of self reliance, demonstrating time and again that for a small island nation lacking in natural resources, they can not only hold their own, but come to dominate militarily, economically, and culturally. By the 1980s, Japan’s prowess in the economy had become apparent, with the manufacturing sector commanding global automotive and electronics markets, and the acquisition of large quantities of foreign assets in real estate, production facilities and government debt. Something changed catastrophically, however, in the 1990s, and Japan’s decades long boom came to an undeniable halt. At the center of it all, contends economist Richard Werner, was the Bank of Japan, and its restructuring of the economy towards a more speculative and consumer driven one via the intentional imposition of a financial crisis.
