On the other hand, it is also possible to encourage firms’ efforts to increase profitability by attaching severe terms to businesses with low profitability accordingly. In that regard, financial institutions are particularly required to identify promising businesses and flexibly provide funds to them. In addition, it is essential to have the so-called risk money to foster new growth areas.
In other words, it is important to improve various financial markets such as for stocks, corporate bonds, and asset-backed securities, which are underwritten using firms’ receivables and assets such as real estate as collateral.