MIDDLE-SIZED, NOT MEDIOCRE
In Japan, hierarchy matters. Just below the Japanese Big Four is a hard-running pack of second-tier securities companies bracing themselves for the consequences of financial deregulation and globalization.
These are firms whose images in the minds of foreigners may still be blurred and featureless -- Nippon Kangyo Kakumaru (NKK), Sanyo, New Japan, Wako and Okasan. Close Behind them are a handful of firms such as Yamatane, Cosmo and Dai-Ichi.
Rapid financial liberalization is clearly disturbing to most second-tier firms. A freer market will undoubtedly give the existing Big Four -- Nomura, Daiwa, Yamaichi and Nikko -- greater elbow room to exercise their capital and manpower for expansion. A regulated market has been, especially for Tokyo, a leash restraining the big players from crushing the weaker and smaller ones.
At the same time, there is a singular threat from below. Some of the small Japanese securities companies (there are 244 licensed securities firms in Japan) are backed by giant banks such as Sumitomo and Tokai. Financial liberalization in Japan also means that big banks may pump funds and first-class personnel into their small cousins to beef up their competitiveness. To a certain extent, this is already happening.