An understanding of the incentives is essential for both policy makers and market participants so that the market activities can be directed towards attainment of objectives of efficiency and effectiveness. While Reserve Bank tries to align incentives by regulation and supervision, regulation itself could create unintended incentives/disincentives as in the case of requirement regarding “HTM”.
Need for financial literacy arising from demographic changes  An aging population and declining birthrate represent the greatest social and economic issues in Japan. The average life expectancy is 80 years for men and 86 years for women, and the population’s longevity is one of the highest in the world.