JAPAN-Grappling with Bank Reform

its worst recession in 50 years. The downslide started about five years ago, but it is only in the last year and a half that things are showing signs of really getting out of control. Supermarket sales are down, real estate has crashed and business of confidence has reached a record low. The dollar is steadily gaining against the yen. There is a consensus among specialists and laymen alike that any effective programme of recovery must start in the dangerously tottering financial system that is strangling the nation's growth. Lately a lot of pressure is being applied by the US to force the pace of banking reform as an important part of a total programme of financial deregulation. A reinvigorated Japanese financial system is held to be the key to stable Asian (and global) markets. "As the country with the world's second largest economy, I determined it wouldn't do for Japan to be the source of a global meltdown", said prime minister Keizo Obuchi. And after hours and hours of meeting with officials, business leaders and partymen, he was ready to come up with a comprehensive plan.