Hashimoto LDP — Big Bang financial reform and Asian-crisis response (1996-1998)

Doctrine — stated goals and content

LDP-reformist moderate — Hashimoto framed his administration as a "six-reform" programme: financial Big Bang, administrative reform, fiscal structural reform, economic-structure reform, social-security reform, and education reform. Economic school reads as conservative fiscal consolidation plus financial-market liberalisation (Anglo- Saxon Big Bang template) — centre-right LDP orthodoxy. Key policy content: (i) Financial System Reform Act (Big Bang) announced November 1996, phased to 2001 — removed Article 65 Glass-Steagall equivalent, liberalised forex (revised Forex Law effective April 1998), opened securities commissions; (ii) Fiscal Structural Reform Act December 1997 setting binding deficit-reduction targets; (iii) consumption tax raised from 3% to 5% on 1 April 1997 — widely blamed for tipping Japan back into recession alongside the Asian crisis; (iv) Hokkaido Takushoku Bank and Yamaichi Securities failures November 1997 — first postwar failures of a city bank and a Big-Four broker; (v) ¥30tn financial-stabilisation package February 1998, Financial Supervisory Agency spun off from MoF June 1998 (operational from FY1998); (vi) New BoJ Law effective April 1998 granting formal operational independence for the first time since 1942. Popularity collapsed after 1997 tax hike and banking failures; LDP lost the July 1998 Upper House election, Hashimoto resigned. Coherence line: fiscal consolidation and financial liberalisation in the teeth of the Asian crisis — the canonical case of pro-cyclical tightening into a downturn.