Unit Eight Winds of Change at BOJ(国际经贸高级英语复旦大学)

TEXTTheBankofJapan,whichtracesitshistoryback116years,iscurrentlyinthemidstofamajortransformation.WiththeenforcementoftheamendedBankofJapanLawthisApril,theBOJwillreceivelegalbackinginlinewithglobalstandardsforautonomyandtransparency,elementsofgreatimportanceforacentralbank.WithalineupofnewfacesonthePolicyBoard,theBankisnowtryingtoachieveitsparamountgoalsofpricestabilityandmaintainingasecurecreditsystem.ThisarticlewillexaminethenewlytransformedBOJ.KeyWords:AutonomyandTransparencyNewBOJDeputyGovernorFujiwaraSakuyaassumedhispostonMarch20.“Inautonomy,”hestatedatanewsUnitEightWindsofChangeatBOJconferenceheldthatday,“ourmodelisGermany’sBundesbank,andintransparency,itistheUnitedStatesFederalReserveBoard［theFed］.”ItwouldbenooverstatementtosaythatthesewordsfairlyarticulatetheidealssoughtunderthenewlyamendedBankofJapanLaw.ThekeywordsofthenewlytransformedBOJarethus“autonomy”and“transparency.”TheoriginalBankofJapanLawwasenactedin1942,inthemidstofWorldWarII.ThelawcontainedaprovisionwhichchargedtheBOJwith“monetarycontrolaswellasmaintenanceandnurturingofthecreditsysteminaccordancewithstatepolicyforthepurposeofappropriatelymanifestingnationaleconomicpower.”Thelawalsocontainedaprovisionstatingthat“theBankmustbeoperatedwiththemissionofachievingsolelythepurposesofthestate.”UnitEightWindsofChangeatBOJInshort,thelawessentiallystatedtheBank’spurposeassupporting,inthespheresofmonetaryandcurrencypolicy,agovernmentengagedinprosecutingawar.Thelawisthuscompletelyunsuitedtopresent-dayconditionsinJapan.“Autonomy”referstotheexecutionofmonetarypolicyindependentlyfrompoliticsandthebureaucracy,while“transparency”meanstheefforttodiscloseinformationsuchthatthebankneverbecomesapoweruntoitself.Theseconditionsareessentialinwinningconfidencefromthemarket.IthardlybearsmentionthattheoldBankofJapanLaw,enactedasitwasmorethanhalfacenturyagoduringwartime,wasinadequateinachievingtheseends.TheBank’sdeficientautonomyinparticularwasafatalflaw,withtheBOJbeingtreatedaslittlemorethananarmoftheMinistryofFinance(MOF)andpoliticiansbrazenlyinterveningtomanipulatetheofficialdiscountrate.UnitEightWindsofChangeatBOJFortheBOJ,amendingtheoutdatedlawandrevisingitscontentinlinewithglobaltrendswas,accordingtoformerBOJGovernorMienoYasushi,a“long-cherisheddesire.”Inthefaceofpoliticalopposition,thisdesirewasnoteasilyachieved.However,theideaofthoroughlyrevisingtheBankofJapanLawaroseinthecontextofproposedeconomicreformsbyPrimeMinisterHashimotoRyūtarō，whoassumedofficeinJanuaryof1996.Followingsubsequentdeliberationbyexperts,adraftfortheamendedlawwascompletedinFebruaryof1997,passingtheDietinJuneofthatyear.ThenewlawenteredforceonApril1ofthisyear.Treatedvaguelyundertheoldlaw,theBOJ’sautonomywasspelledoutundertheamendedlawinaprovisionstatingthat“［theBankofJapan］’sautonomyregardingcurrencyandmonetarycontrolshallberespected.”Meanwhile,thepowersoftheMinisterofFinancetogiveoperationaldirectivesandrelievebankofficialswereremoved,therebynarrowingthegovernment’sroomforintervention.UnitEightWindsofChangeatBOJThisdoesnot,ofcourse,meanthattheBOJisfreetoformulatemonetarypolicyarbitrarilyandwithoutheedtothegovernment.TheamendedBankofJapanLaw,infact,providesthat“...theBankofJapanshallalwaysmaintainclosecontactwiththegovernmentandexchangeviewssufficiently,sothatitscurrencyandmonetarycontrolandthebasicstanceofthegovernment’seconomicpolicyshallbemutuallyharmonious.”Therecanbenodoubt,however,thatthebankhasgreatlyenhancedautonomycomparedwiththepast.AsoneBOJofficialputit,“alegalbasisnowexistsfortheBanktoformulatepolicyindependentlyfrompoliticsandthegovernment.”Ontheotherhand,theBOJcannot,despiteitsenhancedautonomy,remaininsularfromprevailingtrends.Theamendedlawthereforeemphasizestheconceptoftransparencywithaviewtopreventingsuchisolation.Concretely,thelawprovidesthat“［theBank］shallendeavortoclarifytothepublicthecontentofitsdecisions,aswellasitsdecisionmakingprocess,regardingcurrencyandmonetarycontrol.”UnitEightWindsofChangeatBOJPreviously,theBOJhadforthemostpartnotpubliclydisclosedtheprocessthroughwhichitformulatedpolicy,butasdescribedbelow,theBanknowdisclosesthedeliberationsleadingtopolicyformulationinconsiderabledetail.Thecallmorethan10yearsagoforamoreopenBankofJapanhasatlonglastbeenaddressedwiththeseamendmentsinthelaw.AVisiblePolicyBoardNodoubtitisthereformofthePolicyBoard,thehighestdecision-makingbodyoftheBOJ,whichmostclearlyrepresentstheconcreteembodimentoftheideasincorporatedintotheamendedBankofJapanLaw.Thisisbecausenotonlyhasautonomybeengreatlystrengthenedoverthepast,buttransparencyhasbeenenhancedaswell.UnitEightWindsofChangeatBOJAlthoughthePolicyBoardwasdesignatedasthesupremedecisionmakingbodyundertheoldlawaswell,importantpolicymatterswereinrealitysaidtobeformulatedbyameetingofBOJexecutives,includingthedeputygovernorandtheexecutivedirectors,withthePolicyBoardservingaslittlemorethanarubberstamp.TheBoardwasthusfrequentlyseenasa“sleepingboard.”TheamendedBankofJapanLawhasgreatlystrengthenedtheBoard’sfunctioningbyexpresslyplacingtheBoardinchargeofformulatinginterestratepolicy.InthecourseoftheDietd