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Japan Bank Industry Touts Looser Rules on Information Firewalls

Japan Bank Industry Touts Looser Rules on Information Firewalls

Japan’s biggest bank lobby is backing a proposal to ease regulations separating the activities of financial groups’ commercial and investment banking units.

So-called firewall rules that restrict the sharing of information between the two arms can make it difficult for banks to offer integrated services, Kanetsugu Mike, chairman of the Japanese Bankers Association, said at a briefing on Thursday.

The government started discussions on the lifting of regulations including the firewall restrictions last month. Japan has long required a strict separation between commercial and investment banking operations, such as a ban on sharing client information without their consent.

Mergers advisory and business succession planning are among the business areas that face obstacles from the regulations, said Mike, who is also president of Mitsubishi UFJ Financial Group Inc.’s main lending unit.

Other regulatory changes being considered include easing limits on banks’ ability to do non-financial business and raising a cap on equity stakes that lenders can take in companies in other industries.

©2020 Bloomberg L.P.