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This article discusses various issues related to the transition and crisis in the Japanese financial system. The Japanese financial system has been in prolonged crisis throughout the 1990s. There is no single reason for these phenomena. Financial crises typically are complex events that express a variety of underlying contradictions and antagonisms of capitalist production and exchange. Important explanatory elements of the emergence of the Japanese financial "bubble" and of the especial difficulties of post-"bubble" restructuring, are to be found in the very process of financial deregulation attempted throughout the 1980s. This process arose spontaneously and it was not imposed from abroad. Still, deregulation began to influence the character of the Japanese financial system changing it from a bank-based, state-controlled structure aiming at the financing of industrial investment to a market-based, less-state-controlled structure characterized by the competitive profit maximization of financial institutions. In other words, from being a paradigmatic model of 'late developer' long-term industrial lending, the Japanese system began to move toward the market-based short-term lending Anglo-Saxon model.