The current issue of The Economist has two stories about Japanese
banks. The article “Home and Away” shows how Japanese banks has
internationalised in recent years by expanding into the United States
and, more importantly, China. The article focuses on Japan’s three
“megabanks”—Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, Inc. (MHFG) and Sumitomo Mitsui Financial Group (SMFG).
The author of the article wrote,
Previous forays abroad [by Japanese banks] have not ended well.
Japanese bankers have a reputation for arriving late, paying too much,
mismanaging things and then leaving with losses. Most analysts
(privately) say that success is no more likely this time round. The
top brass in Tokyo are too insular. Banks continue to parachute in
Japanese executives to run operations abroad rather than picking
talented foreigners. The megabanks promote their leadership in
formation from the various institutions out of which they were cobbled
This observation is very interesting. It suggests that Japanese culture and the unwillingness of Japanese Big Business to accept and exploit multiculturalism will hamper the efforts of Japanese firms to globalise. One of the reasons why London and New York have maintained their lead as financial service centres is that they are very open to immigration: the European Union, in particular, makes it easy for German or French workers to find employment in the City of London. These workers bring with them language and other soft skills that enrich the City. The United States, as the classic immigration society, benefits in a similar way. While some companies have begun to recruit foreign workers into management tracks, most Japanese firms remain insular in its attitude towards foreign workers and immigrants. Employing foreign workers with the bilingualism and familiarity with the cultures of the booming economies of Asia will be crucial to Japan’s success in banking and other service sector industries.