Japan's financial institutions and instruments are closely related to the United States model. In both countries, new financial instruments, such as structured financial products and exchange-traded funds (ETFs), and new financial institutions - which include hedge funds and private equity funds - present opportunities as well as policy and regulatory challenges. This book presents important and original research on these new institutions and instruments, illustrating the similarities and differences across the two countries. It continues the productive collaboration between the Brookings Institution and the Nomura Institute of Capital Markets Research in examining current issues in capital and financial markets. As this book shows, Japan's financial system is actually evolving more quickly than many in the United States realize. The contributors highlight the innovative ways in which Japanese financiers and government officials have learned from their American counterparts. Experts from the financial industry and academia explain the roles of instruments such as ETFs and real estate investment trusts (REITs) in each country, while also contrasting the development of innovations such as hedge funds, private equity funds, and securitized residential mortgages.