The Changes in the Financial System under IT revolution

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We have investigated the changes in the financial system under IT(Information technology) revolution. Our research focuses the changes in the Japanese financial market structure, in business strategies of financial institutions, and in the role of the Japanese central bark.Regarding the Japanese financial market structure, both the effect of postal saving funds on financial market and the stability of banking system under IT revolution were theoretically investigated. The outcomes of this research were published in three papers and also presented at seminar in various places.Business strategies of financial institutions had been affected by the changes in business environment. IT revolution made it possible for the financial institutions to make such changes. For instance, banks' income structure has been shifted towards ATM commission-based in recent years. We reviewed the literature on this issue and showed the conditions for which an ATM network is formed with other financial institutions and how ATM fees are determined.We also examined the "Lender of Last Resort" of Central Banking under IT revolution. Especially we reconsidered the significance of the Bagehot principle which is the theoretical starting point of the "Lender of Last Resort" of Central Banking. Furthermore, the role and the legal status of Bank of Japan as the "Lender of Last Resort" under the new Bank of Japan Law were discussed.Finally, regarding the Japan's financial system, the bad-loans problem strengthening, of the easing capacity of a financial institution, and the role of capital market were investigated. The research outcome was presented at Dongbei University of Finance aid Economics, China.