The Japanese Central Banking System Compared with Its European and American Counterparts

This book uniquely explores the role and governance mechanism of central banks by applying new institutional economics (NIE). Simultaneously, the book tests the analytical viability of NIE when applied to an organization that has both public and private characteristics. Special attention is paid to the Bank of Japan (BOJ) based on the author's 30 years of work experience and "participant observation" there, touching upon discussion of central bank independence. The book argues that central bank independence cannot be defended solely by law, and a mechanism to eliminate requests from politicians needs to be embedded within the governance structure.

The book also provides a comparative analysis between the BOJ and central banks in Europe and the USA. In reviewing the global financial crisis of 2008-2009, it suggests possible measures based on behavioral economics and public choice theory. These theory-based analyses provide useful insights when considering matters such as whether a central bank should issue electronic money or the European system of central banks could be established in Asia.

Contenu

Foreword

Preface

Acknowledgements

1 Rationale of Central Banks

1.1 Overview

1.2 Earlier Studies

1.2.1 Bagehot's Study

1.2.2 Sayers' Study

1.2.3 Smith's Study

1.2.4 Hayek's Study

1.3 Three Types of Banking Systems and Three Modes of Economic Systems

1.3.1 Three Types of Banking Systems

1.3.2 Examples of Type Change from Type A to Type C in Japan and the US

1.3.3 Three Modes of Economic Systems

1.3.4 Transaction Costs and Modes of Economic Systems

1.3.5 Asset Specificity and Modes of Economic Systems

1.4 Analysis of Transaction Costs in Interbank Transactions

1.4.1 Methodology

1.4.2 Transaction Costs of a Banking System with no Central Bank

1.4.3 Transaction Costs of a Banking System with Central Bank Only

1.4.4 Transaction Costs of a Banking System with Both Central Bank and Commercial Banks

1.5 Importance of Institutional Environment and Recent Changes

1.5.1 Institutional Environment and its Influence

1.5.2 Recent Major Changes in the Institutional Environment

1.6 Implications for Institutional Issues of Central Banks

1.6.1 Evolution of a Supranational Central Bank

1.6.2 Bankers' Associations vs. Central Banks

1.6.3 Central Bank as Supervisor

1.6.4 Clients and Business Scope of Central Banks

1.7 Conclusion

2 Governance Structure of Central Banks

2.1 Overview

2.2 Governance Structure Theory of New Institutional Economics

2.2.1 Williamson's Governance Structure Theory

2.2.2 Theory of Club Goods and Governance Structure of Club Organization

2.3 Application to Central Bank Governance Structure

2.3.1 Central Bank Services and Organizational Features

2.3.2 Arguments on the Governance Structure of Central Banks

2.4 Designing a Central Bank Board Structure

2.4.1 Multiboard Structure

2.4.2 Examples of a Central Bank Multiboard Structure

2.5 Role of Capital Stock

2.5.1 Identifying Matters Related to Central Bank Capital Stock

2.5.2 Application of Williamson's Theory to Capital Stock

2.5.3 Central Bank Capital Stock from the Perspective of Organizational Culture Theory

2.6 Conclusion

3 Public Governance of Central Banks

3.1 Overview

3.2 Application of Transaction Cost Economics

3.2.1 Application of Williamson's Governance as Probity Hypothesis

3.2.2 Application of Moe's Theory on the Autonomy of a Bureaucratic Organization

3.3 Application of Agency Theory

3.3.1 Agency Theory and the Political Process

3.3.2 Features of the Principal-Agent Relationship of a Central Bank

3.3.3 Congressional Dominance Hypothesis and the Central Bank &a...