Question

How do Japan and Switzerland differ or are similar in financial institutions, financial instruments, and financial markets?

Answer 1

Financial institutions :-

The Bank of Japan is the central bank in Japan . It is a juridical person established under the Bank of Japan Act and it is not a government agent . It contributes in maintaining financial stability by issuing bank notes and carrying out currency and monetary control . It's banking system is segmented into commercial, regional, credit and trust banks and thus ensures full transperancy and no tax evasion.

Whereas in Switzerland , the Swiss Financial Market Supervisory Authority is a public law institution that supervises most banking related activities as well as securities markets and investment funds .

The banking secrecy is one of the most essential features of its financial system that helps in tax evasion as Switzerland banking system does not require private bankers to confirm whether or not the taxes have been paid on the deposited amount .

Financial instruments :-

The financial instruments and exchange act is the main statute codifying securities law and regulating securities companies in Japan and securities traded in the Japanese Market are similar to that of Switzerland.

All tradeble financial instruments including shares , bonds and Exchange Traded Funds are traded on SSX ( SIX Swiss Exchange)

Financial markets :-

The financial markets in Japan are divided into short term money market , bond market , long term money market and foreign exchange market .

In Switzerland , the Swiss Interbank Clearing payment system is the central electronic Swiss payment system in which the participating financial institutions process their large value payment . It is operated on behalf of Swiss National Bank .

Another key element is SIX SIS Central Securities Depository and the SECOM settlement system that provides for the custody and settlement of tradeable financial instruments.