Japan has given its official blessing to a new mood of aggression in its banking sector as the country's powerful financial institutions turn their sights on deals with the outside world.

Yoshimi Watanabe, Japan's Minister for Financial Services, told The Times that because the nation's biggest banks had so far emerged from the sub-prime crisis relatively unscathed, they were well-positioned to adopt a bolder stance over deals with Western counterparts.

Speaking only hours after it was revealed that Barclays is negotiating a 100 billion yen (£480 million) capital infusion with Sumitomo Mitsui Banking Corporation, Mr Watanabe said that the new aggressive attitude of Japanese financial institutions “is a change that should be very much welcomed”.

Amid rising foreign criticism of standards of corporate governance in Japan and accusations by senior European trade ministers that the country was “closed” to foreign investment, Mr Watanabe also declared that the banking sector would not be subject to any restrictions on foreign capital.

A rule that was invoked this year to prevent the British-based Children's Investment Fund Management, an activist fund, from holding a 20 per cent stake in one of Japan's major utilities would not be used to protect the Japanese banking sector, Mr Watanabe said.

In further comments that are liable to cause concern throughout corporate Japan, where hundreds of companies have noisily resisted the influence of foreign shareholders, he said that Japanese banks were now obliged to respond to the growing proportion of non-Japanese investors on their shareholder lists.

The fact that shareholders tend to force appropriate governance standards on company managements will, Mr Watanabe said, “bring tension for those managements and create more efficient businesses”.

The Minister, who is a strident advocate for fiercer administrative reform in Japan, believes that the experience of the country's banking sector could teach many lessons to the City and Wall Street as they struggle to cope with the credit crisis.

“The lesson that Japan learnt,” Mr Watanabe said, “was that the background of a general liquidity crisis was not just a question of the solvency of each financial institution, but of the system as a whole.

“The right tools were needed to establish the true value of assets, rather than [doing what Japan did] and avoiding ever facing up to the problem.”

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