The research will assess Japanese markets for private business credit by focusing on Japanese law governing secured transactions in tangible movables (e.g., a firm's inventory or equipment) and claims (e.g., a firm's accounts receivable) to secure extensions of business credit. It will investigate reasons for Japan's failure to adopt modern principles of secured transactions law (i.e., a comparative approach), analyze Japan's current secured transactions law, and explore relationships among credit markets, prospects for modernization of law, the potential impact of such modernization on markets, and secondary markets for business assets. It will analyze relevant data and employ semi-structured interviews in Japan of professionals, academics, and staff of relevant organizations. In recent decades there has been a global movement toward adoption of modern principles of secured transactions law. There also have been advances in the development of internationally accepted standards through the work of the United Nations Commission on International Trade Law (Uncitral), the International Institute for the Unification of Private Law (Unidroit), and various other intergovernmental organizations and development banks. These modern principles recognize the overarching objective of a modern secured transactions law as promoting extensions of credit at a lower cost or that otherwise would not occur, and that such credit extensions provide a range of economic benefits. The modern principles include: (i) availability of the full value of all types of personal property, including future assets, as collateral for secured obligations; (ii) clear and predictable priority rules; (iii) establishment of a security interest registry for registration of notices of security interests; (iv) facilitation of the enforcement of security interests following a debtor's default; (v) comprehensive coverage of all forms of security devices; (vi) extension of security interests to the proceeds of collateral; and (vii) general acceptance of freedom of contract between debtors and creditors. In the latest World Bank Group Doing Business survey, Japan ranked 79th in "Getting Credit." Negative factors resulting in this low ranking were primarily deficiencies in Japan's secured transactions laws. Given the size and importance of the Japanese economy, the research on secured transactions in Japan and Japan's failure to modernize its secured transactions laws is significant and necessary. While there is considerable available data on Japans business credit markets, there has been little research addressing why Japan has failed to modernize its secured transactions laws or whether such modernization actually would facilitate the extension of lower-cost credit. Moreover, the objectives of the research extend beyond the Japanese context. Looking beyond Japan, and in particular to emerging markets, it will explain which credit markets might benefit the most or least from adopting modern principles and which structural changes in markets and other laws (e.g., insolvency laws) may be necessary for achieving optimal benefits from reform. This novel approach distinguishes the project from other explorations of secured transactions law reforms.