Abstract
After the opening of Japanese ports to Western countries in 1859, Japanese foreign trade and trade finance were dominated by Western merchants and banks along with Chinese merchants. The Japanese government encouraged Japanese merchants to conduct business directly with merchants on foreign soil and established government-related banks such as Yokohama Specie Bank, the Bank of Taiwan, and the Bank of Chosen to give foreign finance. Just before the First World War, Japanese merchants traded about a half of the Japanese international trade and Japanese banks also gave about a half of Japanese international trade finance. During the War, non-government-related banks such as Mitsui Bank and Mitsubishi Bank of which main customers were their zaibatsu affiliated trading companies such as Mitsui and Co. and Mitsubishi Corporation began foreign exchange business and foreign banks’ market share dropped significantly because of the wartime control by their home countries. In the 1920s, foreign banks regained some of their lost business but could not take as much share as before the War. After the Great Depression, however, the Japanese government introduced foreign exchange control to reduce trade deficits and activities of non-government-related banks were restricted; therefore, market shares of the Japanese government-related banks increased again.
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Notes
- 1.
“A change of name,” Bankers’ Magazine, August 1913, pp. 138–9.
- 2.
Most national banks were converted to banks around 1897, under the Banking Act of 1890.
- 3.
In 1904, Kansai Bank (Marifu, Yamaguchi) and Suo Bank (Yanai, Yamaguchi) established offices in Manila; however, both of them were short-lived, with the former closing in 1908 and the latter in 1905.
- 4.
Mitsui and Co. had offices in Europe and the USA and the House of Mitsui was well known there.
- 5.
Because Itoh (1989, pp. 26, 160, 312) compares Japanese banks’ total amount of foreign exchange transactions, which includes third-country transactions, to foreign banks’ amount of foreign exchange transactions, which contains only transactions from and to Japan proper, he underestimates foreign banks’ market share. On the other hand, Tatewaki (2002, p. 80) compares foreign banks’ amount of foreign exchange transactions relating to Japan proper with Japan’s current accounts and overestimates foreign banks’ markets shares because banks bought and sold a large amount of foreign exchanges not directly related to trades of goods and services.
- 6.
Shichijushi Bank, which was based in Yokohama and provided financing for exporting silk to the USA, closed its doors in 1920 and Jugo, Kajima, Omi, and Kanda banks followed suit facing severe bank runs in 1927. Daihyaku Bank merged with Kawasaki Bank to form Kawasaki Daihyaku Bank in 1927 and Yamaguchi, Sanjushi, and Konoike banks, which were all based in Osaka, merged into Sanwa Bank in 1933.
- 7.
In 1935, Daiichi Bank had two offices in Korea, Yasuda Bank three, Sanwa Bank one, and Juhachi Bank nine (Juchachi Bank withdrew from Korea completely the next year). Also, in Taiwan, Japan Hypothec Bank (a GRB) and Sanwa Bank each had three offices.
- 8.
Banque Belge pour l’Etranger was established in Brussels in 1822 and founded its Shanghai branch in 1902 (Ji 2003, 77).
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Kasuya, M. (2020). Japanese International Banking. In: Nishimura, T., Sugawara, A. (eds) The Development of International Banking in Asia. Studies in Economic History. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55615-2_11
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