THE METAMORPHOSIS OF FINANCIAL SPATIAL STRUCTURE IN TOKYO

Abstract

Objectives: It is a well-known fact that metropolitan characteristics are drastically alteredd in response to the concentration of services in metropolitan areas. The object of this study is to investigate financial functions, one of the most important elements in regional transformation. In this paper, the financial institutions' sequence of branch office openings and closings, and their processes of spatial concentration and expansion in a large metropolis are examined. The regional movement of funds is illustrated by analyzing the loan-deposit ratio in each district. Since the above stated processes differ according to the size of the financial institutions, the large ones are segregated from the small-medium ones. Methods: The article is concerned with the area in and around Tokyo's core, where the highest concentrations of financial functions are found in Japan. Long-term credit banks, city banks, regional banks, and trust banks are classified as large scale institutions, while credit associations are classified as small-medium scale institutions. Financial space is defined as the area in which the monetary activities take place. In order to illustrate the changes in the financial space, the opening dates of new branches are plotted on a series of maps. Materials concerning the banks were obtained from publications of the Association of “All” Banks, while those on credit association were derived from the National Directory of Credit Associations. The spatial changes of the financial institutions are seen chronologically, by dividing the years between 1960 and 1975 into three, five-year periods. The Ministry of Finance exercises rights of administrative management over the establishment of new branches by monetary institutions. It also publishes a circular on prevailing economic trends related to the establishment of new branches. At present, banks are permitted to open two new branches within a two year period. Accordingly, each bank, in selecting a site, to locate a branch, will choose places with the greatest potential for activities. In cases where they want to open more than two branches within a twoyear period, transpositioning is permitted, i.e., for each additional place, an already existing one at a different site must be closed. Thus, the yearly changes enable the identification of spatial modifications. As stated above, the 15 year period was divided into three, five-year phases and plotted on maps. The location of newly opened and closed offices are drawn in the same manner. The mean center of the financial institutions for each phase are noted, and the movements of the mean centers are traced. Furthermore, because of regional maldistribution in capital accumulations and investments, the loan-deposit ratio for each district is scrutinized separately, and the resulting tendency toward inter-regional flow of capital is assumed. Finally, in order to demonstrate that the role performed by financial institutions in an area differ according to scale, the chronological variations in the loan-deposit ratio of banks and credit associations are shown. Conclusions: 1) Gradually, the financial space of banks and credit associations in and around metropolitan areas is expanding. On one hand, it is seen that the density of bank branches in the core of the capital's central business district, and in the secondary business districts, such as, Shinjuku, and Ikebukuro is rapidly increasing. On the other hand, the number of closures outside the area encircled by the Yamanote Railway Line is proceeding at an accelerated pace. Branches specializing in loans can be clearly separated from those where deposits are larger than loans. Likewise, capital absorption areas are distinct from those of investments. Deposit-absorbing areas move in a manner analogous to the population doughnut phenomenon, spreading to the periphery of large metropolitan areas.