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Monday, Aug. 16, 2004
A fairy tale warning for financial giants
By NORIKO HAMA
Oscar Wilde is the spinner of some of the finest tales in literary history. He wrote for a very wide-ranging public, including children. His fairy tales are truly fine. It is a characteristic of Wilde's fantasy tales for children that they contain profound insights into the very real world of adult folly and shortsightedness. "The Selfish Giant" is a prime example.
The Selfish Giant lives in an extremely large castle. Its garden is vast and it is beautifully maintained. Its vastness and beauty attract a lot of children from outside its walls who otherwise would have nowhere nice to play. But true to his selfish nature, the giant will have none of it. His garden is his own, and he will not hear of sharing it with the little ones.
Japanese banks are also giants. They are growing ever more gigantic. In the process, they are trying very hard to make their gardens not only large, but quite exclusive as well. There is nothing wrong with that, as such. Grow or die, is very much the writing on the wall where the global banking community is concerned.
But what about the space for the little ones? Small, regionally based lending institutions have traditionally played an important role in local finance. They are the ones with the real knowhow as far as servicing small businesses is concerned. The way things are going however, the giant banks actually look increasingly eager to stampede their way into their lending activities. So it is not just a case of making their own gardens off-limits, but of encroaching on the turf of others outside, leaving ever less room for the smaller people.
And it is not just the banks. Postal privatization is the next big item on Prime Minister Koizumi's reform agenda.
The post office is a giant in its own right. Its assets are huge and its network enormous. Judging from the comments of its senior management, the postal service, as it privatizes, is looking to consolidate itself into an even more gigantic operation encompassing mail delivery, savings, insurance and management of the entire post office network.
It makes one wonder what the post office exists for in the first place. The post office is, after all, the post office. Acquiring big business is not really what it is there for. True, postal savings played a vital part in the postwar rebuilding of the Japanese economy, and it was a highly effective device for channeling small savings into big public works projects. At the time, postal savings had a public policy role to play. But that was then and this is now. After all is said and done, the single most important public role for the post office should be to meet the mail delivery requirements of the community everywhere, however large or small.
Mega-banks and the mega-postal service: selfish giants both. If they insist on staking out ever larger gardens for their sole enjoyment, they ought to know what they are risking. For look what happened to the giant in Oscar Wilde's story.
By shutting out the little ones, the giant also manages to shut spring out of his garden. Thus his garden becomes a place of never-ending winter: cold, bleak and miserable. It is only when the giant relents in his old age and welcomes back the smallest of the small children that he is blessed with a blooming garden once more. That smallest child turns out to be Jesus Christ, in whose embrace the giant is assured a place in heaven.
The giants of the financial world would do well to go in for a spot of fairy tale reading this summer.
Noriko Hama is an economist and a professor at Doshisha University School of Management.