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A Maverick Sidesteps Stodgy Banks

By Cameron W. BarrStaff writer of The Christian Science Monitor / August 18, 1998



TOKYO

Takashi Yoneda has a vision of how he wants his life to turn out that can only be described as Far East Hampton: No working dinners on Fridays, a country house for the weekends, and no breakfast meetings on Monday mornings. Of course, he plans on doing well financially. He says he already is.

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Saying things plainly is part of Mr. Yoneda's shake-things-up style. Fortyish, built like a slightly undersized linebacker, he speaks easy-going, idiomatic English, has an American business partner, and is married to an Air France flight attendant.

This aggressively global entrepreneur represents two aspects of the evolving Japanese economy. One is that the work force has ceased to be a group of faceless men interested in lifelong jobs at a big corporation and willing to work beyond reason for the privilege.

What Yoneda wants, aside from satisfying work, is a lifestyle, something that is a foreign concept to most Japanese breadwinners.

The other evolution is in Yoneda's mtier: finance. One can argue about the pace of change in Japan's economy or the sincerity of the government's reforms. But this much is certain: The banking system that funded Japan Inc. for most of the past half century is doomed. If the system were to crash heavily, the impact would badly hurt Wall Street. The best hope is that it will crash lightly, the effects of its breakdown cushioned by politicians willing to make tough decisions.

Yoneda, in his own small way, is trying to create a soft landing. He sees a new system in which companies are not reliant on banks for capital and where people can do more than keep their savings in banks or add them to the pool administered by Japan's postal service.

From his style of speech to his career path, Yoneda is a maverick in Japan, but even the government is now pleading for more people to show initiative and innovation. The Economic Planning Agency, in July's annual report, said "the government should strive for structural reform which will reward risk-taking economic activities fairly." Many Japanese are fond of noting that entrepreneurs created Sony, Honda, and other icons of Japan's economic success.

Yoneda spent the beginning of his career at the large, prestigious Industrial Bank of Japan (IBJ). "I come from one of the most eminent financial institutions, where they take the cream of the crop from the universities, and I was told I was crazy to leave," he says. But in 1991 he quit anyway and says his old colleagues praise his foresight. "Oh, Takashi," he quotes his friends as saying, "you've made the right move."

A good system that hung on too long

The existing banking system was brilliant while it lasted, but it has now become a huge drain on the world's second-largest economy. After World War II, the bureaucrats in Japan's Ministry of Finance decided to keep control of the allocation of credit so they could guide the rebuilding of the country's industries. They made it very difficult for companies to raise funds in the stock market - where many players make control impossible - and made bank loans the only real source of capital.

For a while, this arrangement produced winners all around. The banks burgeoned, since depositors had few other options. The banks also profited, since they didn't have to pay a lot of interest. And in exchange, they obeyed when the ministry suggested offering cheap loans to certain companies, in accordance with the government's plan for industrial growth.