Does the Presence of the Japan Post Bank in a Regional Financial Market Affect the Deposit Interest Rates of Credit Associations?

Abstract

The former Minister Shizuka Kamei, who was appointed as the Minister for Financial Services during the premiership of Yukio Hatoyama, pushed reforms to change the previous goal of completely privatizing the postal services. The basic policy is that participation by the government in the businesses of postal savings will be practically maintained and the ceiling of postal savings will be raised from 10,000,000 yen to 20,000,000 yen. Therefore, in the present study we analyzed whether credit associations in a region whose share of postal savings is larger are being pressured to set higher deposit interest rates due to the presence of postal savings. The results showed that the presence of postal savings in a region does not pressure credit associations to set higher deposit interest rates, at least under the present conditions. It can thus be concluded that if a set of reforms is carried out which maintains the participation of the government in the Japan Post Bank, the ceiling of postal savings should be frozen at the present level.postal savings, credit associations, deposit interest rates, privatization of postal services, the ceiling of postal savings