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.
Nonetheless, they are no longer adequate to address the problems resulting from the everchanging nature of today’s global economy. We have made substantial progress in reforming the rules and practices that used to support the economy but had grown obsolete.