Those efforts by market participants over the years helped prevent the failure of Lehman Brothers from causing devastating ripple effects across the whole financial market in Japan.4 It is also true, however, that the experience of the recent financial crisis revealed a few challenges of making the clearing and settlement of JGBs more robust.
That has led market participants to make constant efforts to improve the safety of JGB settlement. I will illustrate two major examples of such market initiatives. One is to shorten the JGB settlement cycle, which is aimed at shortening the time-lag between the execution of JGB trading and their settlement.