(7) Concluding Remarks
　　

I must confess that this is only my second visit to Japan and thus, it would be completely presumptuous for me to render any judgment on or offer specific solutions to the current economic problems. In closing, I will however make a few observations that I believe are optimistic for the longer run.

Considering current economic concerns, the following three characteristics of Japan's investment environment today seem to create an economic paradox: a) the world's largest pool of savings; b) a highly educated and technologically advanced population that has consistently demonstrated its ability to innovate and compete on a global basis; c) a conviction among many international observers that the investment opportunities in Japan are equal or better than those available almost anywhere else in the world. Evidence of this belief can be seen in the huge and continuing growth in investment banking and asset management resources being deployed in the country.

I am certainly not sure about the resolution of this paradox, but I have a strong belief that an important part of it will come from restructuring the financial system. A major task to be sure, but one that is ultimately achievable.

On this point, I underscore that the functional perspective and the financial engineering analytical approach treat all economic institutions, whether private sector, governmental or family, as potential solutions to provide the most effective performance of financial functions. There is no ideological bias among what mix of institutions to use. Thus, financial engineering is an important tool of analysis no matter whether the financial system is dominated by governmental institutions or by private-sector ones or by a balanced mix of the two. It looks only to help find the best way to perform the financial functions for a given system at a particular point in time.

If the revised financial system is designed with the most-up-to-date financial technology, then Japan can "leap-frog" over existing systems in terms of efficiency. Financial engineering will play a central role in this achievement.

With the developed countries, Japan and EMU Europe in particular, and the emerging ones both working on major changes in their financial systems, I am absolutely certain about one thing: now and well into the 21st Century will be exciting times for finance and financial engineering.

トップページへ戻る