NationStates Jolt Archive

http://www.washingtonpost.com/wp-dyn/articles/A30418-2004Sep17.html
The Japanese government penalized Citibank's private bank that deals with wealthy individuals, and ordered it to be shut down.
Now I'm not denying that Citibank's operations here were a little corrupt, but I feel that shutdown is extreme. Even more troubling is that this is part of a pattern that existed for decades: the Japanese business atmosphere is very clubbish. Only a Japanese businessman seems to ever do well in a Japanese corporation, and until a few years ago, the Japanese government ensured that there was no serious foreign competition in Japan. I thought that was a controlled instinct, reversed since PM Koizumi took office. But alas, it still lingers in Japan.

http://www.washingtonpost.com/wp-dyn/articles/A30418-2004Sep17.html
The Japanese government penalized Citibank's private bank that deals with wealthy individuals, and ordered it to be shut down.
Now I'm not denying that Citibank's operations here were a little corrupt, but I feel that shutdown is extreme. Even more troubling is that this is part of a pattern that existed for decades: the Japanese business atmosphere is very clubbish. Only a Japanese businessman seems to ever do well in a Japanese corporation, and until a few years ago, the Japanese government ensured that there was no serious foreign competition in Japan. I thought that was a controlled instinct, reversed since PM Koizumi took office. But alas, it still lingers in Japan.
Good for them. Maybe they will keep their economy within local hands then, unlike everywhere else where US corporations got their dirty money-grubbing fingers in, leeching off the national economies worldwide and sucking the people dry.

Good for them. Maybe they will keep their economy within local hands then, unlike everywhere else where US corporations got their dirty money-grubbing fingers in, leeching off the national economies worldwide and sucking the people dry.
Well, I am not sure how much former East Germany has intergrated into the world economy, but you probably know of businesses from all over the functioning core, that is the US, Europe, and Japan. Out of the three, only Japan has such a closed economy. I love the idea of foreign competition in the American market, A lot of American companies are inefficient, and deserve to go. We're seeing that in the auto industry, where Chrysler was bought by Diamler-Benz, and Toyota now pledges to dethrone GM as having the largest market share in the US by 2010.

I am generally in favour of protectionism, but that is a lesser bias in this case. I am cheered by that news as I feel that financial institutions in general have become far too arrogant and complacent for their own good, and the trivial fines occasionally awarded by regulators for misconduct really do not give such companies enough of an incentive to stay clean. Shutting down the odd subsidiary on the other hand, may prove to have excellent moral effects. It is an approach that should perhaps be tested more widely, before a verdict regarding its alleged excessive severity can be made.

I am generally in favour of protectionism, but that is a lesser bias in this case. I am cheered by that news as I feel that financial institutions in general have become far too arrogant and complacent for their own good, and the trivial fines occasionally awarded by regulators for misconduct really do not give such companies enough of an incentive to stay clean. Shutting down the odd subsidiary on the other hand, may prove to have excellent moral effects. It is an approach that should perhaps be tested more widely, before a verdict regarding its alleged excessive severity can be made.

Shutting down the foreign firm merely encourages the atmosphere of corruption and exclusivity among Japanese corporations. This episode perfectly illustrates the cozy and highly questionable relationship between Japanese conglomerates, the keiretsu, and the Japanese government... sure, the American firm should be penalized for infringements but such a high profile case would never happen to Japanese companies and industry leaders, who are frequently protected by the government from punishments for acts of major corruption. It is reasonable to suggest that the government moved to protect Japanese companies from foreign competition, even if the Japanese companies themselves technically violated the laws with which they declaw the foreign competitor.

If Japanese firms are involved in corruption, then I would hope the government moves against them in a similar fashion. But of course I accept that that is highly unlikely to happen given politicians' traditional links to big business.

The fact that they singled out a US firm? Maybe the regulators there can realistically only act against foreign firms, for the reasons you suggest. That only provides a case for further improvement to the system, it does not make it any less right to punish the foreign company involved.

You almost seem to suggest that Western corruption should be permitted to balance out a domestic monopoly on corruption.

The fact that they singled out a US firm? Maybe the regulators there can realistically only act against foreign firms, for the reasons you suggest. That only provides a case for further improvement to the system, it does not make it any less right to punish the foreign company involved.
The punishment of the Citibank firm cannot be judged to be wholly "right" or "wrong"... in a vacuum the Japanese government's action is definitely good but in this case, where there are countless factors and competing interests with a stake in the outcome, a crooked operation was shut down but ironically this also makes the whole system more corrupt - this perpetuates the connections between corporations and the government and makes the government even more blind to the sins of Japanese corporations and even more unlikely to enforce anti-corruption and anti-fraud statutes on native companies. This is indeed a morally difficult issue, on which I am completely stumped by all the contradictions and perplexities of Japan's economic and political system.

Well, it's not an ideal situation, I know, but they have to start somewhere. And if acting against corruption in one place perpetuates it elsewhere, that's better than inaction, I think. At least they're doing something, rather than allowing a free-for-all to avoid creating contradictions in policy.

I am generally in favour of protectionism, but that is a lesser bias in this case. I am cheered by that news as I feel that financial institutions in general have become far too arrogant and complacent for their own good, and the trivial fines occasionally awarded by regulators for misconduct really do not give such companies enough of an incentive to stay clean. Shutting down the odd subsidiary on the other hand, may prove to have excellent moral effects. It is an approach that should perhaps be tested more widely, before a verdict regarding its alleged excessive severity can be made.
In a perfect world, it may be fine. But we know about the Japanese government, and how it goes out of its way to protect its economy, even at that same economy's expense. However, I am becoming increasingly optimistic that Japan is changing its tune, if reluctantly. Junchiro Koizumi has done a lot to losen the government's feirce protection of the economy, and as a big no-no for Japanese PMs, he's airing commercials in the US begging for investors (he speaks good English, too). Besiides, a lot of European and American law firms are opening offices in Tokyo. With those lawyers around, Japanese laws can be used against the government. We may be beating them at their own game, for the first time in decades.