Why Japan Needs to Develop its Corporate Bond Market

Jonathan A. Batten*, Peter G. Szilagyi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


Analysis of flow of funds data provides evidence of gradual disintermediation in Japan's financial system, but the major channel for the allocation of domestic savings to productive assets remains bank intermediated lending. Overall, the Japanese financial system is still bank dominated, with the lending patterns of the past decade bearing witness to the adverse selection and moral hazard problems that may arise from a market overly reliant on intermediated financing. This study recommends further development of Japan's corporate bond market with improved access by foreign participants including borrowers, investors and investment banks.

Original languageEnglish
Pages (from-to)83-108
Number of pages26
JournalInternational Journal of the Economics of Business
Issue number1
Publication statusPublished - Feb 2003


  • Bond Markets
  • Financial System Reform
  • Japan


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