Explore BrainMass

Explore BrainMass

    Japanese banks owning stock

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Banks in Japan are allowed to own stock while U.S. banks are not. Is this a good idea? Why or why not? Defend your answer.

    © BrainMass Inc. brainmass.com June 4, 2020, 4:17 am ad1c9bdddf

    Solution Preview

    So this is the type of Yes or No question that really does not have a right or wrong answer. So ultimately you must give your opinion. I will try and help you to form one as well as some points for defending it.

    Banks in Japan are members of the central bank- The Bank of Japan or BoJ for short. The US banks are members of the Federal Reserve System also known simply as "The Fed".

    To determine if it is a good idea for these member or central banks to own equities would depend on your macroeconomic views. There are really two ends of the spectrum. Which do you favor:

    The Keynesian Theory-Central planning/Government intervention: If you are of the Keynesian school you are going to support banks owning equities. A good reason why is that is gives ...

    Solution Summary

    An explanation of why the BoJ and other central banks own stocks and other financial assets while the Federal Reserve can't own stocks. To answer this question a description of both the The Keynesian Theory-Central planning/Government intervention and the Austrian theory of economics are provided.