But it does raise two important questions: first, are we at a tipping point where the future of banks is challenged? And second, should regulators care? That is, should we protect banks from recent technological shifts and the emergence of new competitors? Should regulators have a preconceived idea of which financial structure is best for society, bearing in mind the trade-off I mentioned before?
Unlike Europe and the United States, Japan is one of a handful of countries for which real consumption per capita has exceeded the levels prior to the Lehman shock (Chart 19). As I have noted today, in order to overcome deflation, firms, financial institutions, the government, and the central bank must play their respective roles, through which this challenge can surely be met.