During the high growth era of 1955 to 1973, the Japanese financial market used to have a character very different from those of the USA and the UK. First, financial intermediaries dominated the corporate financing pattern, while the securities market was less developed. Second, the money market developed in an unbalanced way, due to the underdevelopment of the open market and the importance of the inter-bank market.

Since the early 1970s, significant changes have occurred in the nature of the Japanese financial market through large flotations of bonds caused by a large government deficit, internationalization and the deregulation of the financial market. As a result, Japan's financial market has become comparable with those of the USA and UK, although a few differences still survive. In this transforming process, the Japanese financial system has been facing critical problems: one is the problem of stabilizing the financial system, closely related to that of bad debt; the other concerns corporate governance in so far as the monitoring capability of the main bank has declined, but an alternative system has not been established.