The rules and practices that have been supporting economic growth in Japan up to recent years have emphasized long-term relationships among firms as well as between firms and banks, based on the assumption that high growth would continue. These rules and practices enabled firms to expand their business over the long term while absorbing moderate economic shocks.
In addition to these “TTT” criteria, the measures should be consistent with other policy objectives such as fiscal sustainability, long-term economic growth and the functioning of the market mechanism. Implications of policy measures The current crisis has increased the role of the government in the economy. Some bank rescue operations have involved outright nationalisations, so governments now have significant exposure to the financial sector.