NEW YORK (CNNfn) - New alliances are springing up throughout Japan's troubled financial sector, as struggling firms look to each other to remain competitive amidst the country's "Big Bang" reforms.
Partnerships are being forged throughout the struggling industry, with Industrial Bank of Japan Ltd. (IBJ) and Dai-Ichi Mutual Life Insurance Co. the latest to report a link.
The companies said as part of the alliance they will invest capital in each other in the current and future fiscal years.
Earlier in the week, IBJ and brokerage Nomura Securities Co. Ltd. said they will form a London-based derivative joint venture as part of a strategic pact announced in May.
And Dai-Ichi Kangyo Bank Ltd. (DKB) said Thursday it is pairing with J.P. Morgan & Co. Inc. in the Japanese retail investment trust business.
The flurry of alliances among Japanese financial firms has been prompted by the country's "Big Bang" reforms, which will allow commercial banks to market investment trust funds beginning in December.
The reforms, aimed at liberalizing the struggling sector by the year 2001, pave the way for larger banks to start full-scale securities and trust businesses through subsidiaries or holding firms in the latter half of fiscal 1999/2000.
Japanese banks also have become increasingly concerned about steep losses in their shares due to worries over their slow progress in eliminating massive problem loans.
One financial analyst, who declined to be named, said that although details of the alliance aren't clear yet, the tie-up between IBJ and Dai-Ichi probably will free Nomura Securities eventually to link up with Nippon Life Insurance Co., Japan's largest life insurance company.
-- from staff and wire reports