The Japanese public financial system has been a hot topic of debate, with some believing that public institutions are growing too large and squeezing out private financial institutions. This study aimed to confirm whether the public financial sector is indeed ballooning and if government enterprises have unfair advantages. The researchers found that public financial activities did increase until 1998, but have since stabilized or decreased. They also discovered that the extent of privileges given to government enterprises may not be the main reason for their dominance. The size of these privileges needs to be measured to fully understand their impact.