Message from the Director

Kazuo Ueda
Center for Advanced Research in Finance
Kazuo Ueda

The Center for Advanced Research in Finance (CARF) aims to play a central role in financial research in the Asia Pacific region. Our mission is to contribute to the sound development of the economies of Asia and the world through the promotion of theoretical and practical financial research. In order to achieve this objective, CARF endeavors to be a research center that is open to scholars from around the world.

With the importance of Asian economies and Asian firms growing rapidly in the global economy, Japan’s financial and capital markets should play an active role in the development of the Asian economic region. Neighboring Asian countries, which are achieving rapid economic growth, require huge amounts of funds. What should Japan’s markets and financial system look like to fulfill their function as a financial center supplying funds for this growth? The design of such a financial system and policy proposals, as well as financial theory aimed at the development of innovative investment, fundraising, and risk management are the most important research topics CARF seeks to address. Another important role of the Center is to conduct research from a variety of perspectives -- micro and macro, theoretical and empirical -- on the successes and failures of Japan’s financial system in the past in order to promote balanced development of Asian economies in the future.

CARF aims to promote this kind of research on the basis of three principles. First, the Center supports cutting-edge theoretical and empirical research by hosting scholars from around the world. In order to do this, CARF has been developing close relationships with major universities and research institutions worldwide. Second, CARF promotes research projects developed in cooperation with industry and policymakers. By combining the knowledge, experience, and practical expertise of those directly involved in business, markets, and economic policy-making with academic theory and ways of thinking, we hope to design policies for the proper functioning of the financial system and develop techniques for innovative financing, investment, and risk management. And, third, the Center promotes the construction of databases, which are essential for research. The Center seeks to advance empirical research by gathering world-class researchers at the Center and providing them with access to extensive financial micro and macro data covering financial and capital markets around the world, with special emphasis on databases on Asian financial and capital markets. The results of research conducted at CARF are disseminated worldwide in a variety of forms such as article in academic journals, working papers, book publications, on our website, and at workshops and international conferences.

Based on these activities, CARF aims to be a global center for leading financial research on Asia in the 21st century.


The Center for Advanced Research in Finance (CARF) was established at the University of Tokyo in April 2005 with the aim of becoming an international hub of financial research and education in Asia. The Graduate Program in Finance was established in April 2005, followed by the Undergraduate Program in Finance in 2007, and by combining these programs with world-class financial research, the Center seeks to develop researchers and leaders in the field of finance for the 21st century.

CARF has received approval from the Ministry of Education, Culture, Sports, Science and Technology (MEXT) as an institution for collaboration between industry and academia. The Center is funded by the Japanese government and also receives financial support from a wide range of business and financial partners.

With the aim of becoming Asia’s leading center for financial research, CARF pursues the following missions:

Pursue cutting-edge research in financial theory by inviting leading researchers from around the world.
Build a financial data center offering rich data both in terms of quantity and quality and pursue empirical research on financial and capital markets in Asia.
Analyze the successful and unsuccessful elements of Japan’s financial system from both a theoretical and empirical perspective to provide support for a balanced development of Asian economies. Make proposals for the design of financial systems and policies to promote sound economic development.
Develop financial researchers and leaders for the 21st century by conducting research utilizing industrial and financial partnerships, as well as develop innovative techniques for fund management, financing, and risk management.

Research Areas

Research at CARF can be divided into the following four major areas.

Research on Price Dynamics

Research in this area seeks to elucidate how prices at the micro-level – that is, prices of individual goods and services – are determined and how this is linked to prices at the macro-level. Along with investigating the reasons for price fluctuations in individual countries such as Japan, which has suffered from long-term deflation, research focuses on developing a price index that matches consumers’ perceptions. In addition, factors underlying fluctuations in asset prices such as stock prices, exchange rates, and real estate prices are examined.

Asset Price Bubbles and the Financial System

This topic consists of two related research strands. The first strand focuses on the efficiency and robustness of the financial system in channeling savings to investments. Specific issues examined include why financial crises occur, what kind of financial regulations should be put in place to increase the robustness of the financial system without compromising efficiency, how new developments such as “fintech” (financial technology) affect financial intermediation, and to what extent monetary policy should pay attention to problems in the financial system. The aim of this research is to elucidate these issues in collaboration with practitioners and policy-makers. The second research strand focuses on asset price bubbles and examines the mechanisms underlying the rapid rise and subsequent collapse of asset bubbles such as Japan’s land price bubble during the 1980s and the subprime housing bubble in the 2000s in the United States, and how such bubbles are linked to macroeconomic fluctuations. Further, this strand seeks to analyze the role of financial institutions in the rise and fall of bubbles and make recommendations on what financial regulations should look like to prevent financial crises.


Research under this topic focuses on proposing various new asset management methods using state space models, fuzzy systems, and machine learning. In addition, the aim is to propose new methods of assessing and calculating the value of financial assets taking a variety of factors that have received considerable attention in recent years – such as credit risk, collateral contracts, and changes in volatility – into account and to provide a mathematical basis for these methods. Furthermore, research under this topic seeks to examine the pricing of derivatives based on low-liquidity underlying assets, analyze high-frequency trading markets using big data, and examine revenue management by hotels.

Accounting and Corporate Governance

Research under this topic seeks to examine the role accounting information plays in securities markets and in the settlement of interests between parties. In addition, research focuses on what kind of theories support the system of accounting standards on which the generation of accounting information is based and examines the rationality of these theories. Regarding the rationality of accounting standards, research also focuses on the extent to which domestic and international accounting standards are and can be aligned.


Industry Support

The Center for Advanced Research in Finance at the University of Tokyo is a research organization authorized as an industry-university partnership institute by the Ministry of Education, Culture, Sports, Science and Technology. It is jointly financed through public funding and private donations. CARF is presently supported by the following companies:

  • Sumitomo Mitsui Banking Corporation
  • The Norinchukin Bank
  • MUFG Bank, Ltd.
  • EY


The Center for Advanced Research in Finance (CARF) is seeking donations from individuals and organizations in order to enhance and develop its research and educational activities on Japan's financial system. All donations will be gratefully received and utilized with the utmost care in line with our mission.

To donate, please contact a CARF faculty member or the CARF Research Support Office.

Endorsements from Abroad

  • William F. SharpeSTANCO 25 Professor of Finance, Emeritus, Stanford University
  • Myron S. ScholesFrank E. Buck Professor of Finance, Emeritus, Stanford University, Chairman of Oak Hill Platinum Partners
  • Stanley FischerGovernor of the Bank of Israel
  • Robert C. MertonJohn and Natty McArthur University Professor, Emeritus, Harvard Business School, Harvard University
  • Stephen A. RossFranco Modigliani Professor of Finance & Economics, Massachusetts Institute of Technology (MIT)
  • Alan S. BlinderGordon S. Rentschler Memorial Professor of Economics and Former Co-director of the Center for Economic Policy Studies at Princeton University
  • Bruno SolnikDistinguished Emeritus Professor of Finance, HEC School of Management (France)
  • Stephen H. PenmanGeorge O. May Professor of Accounting and Morgan Stanley Research Scholar, Columbia University
  • Douglas T. BreedenWilliam W. Priest Professor of Finance, Duke University, Former Dean of Duke's Fuqua School of Business since 2001
  • Darrell DuffieDean Witter Distinguished Professor of Finance, Stanford University
  • Franklin AllenNippon Life Professor of Finance, University of Pennsylvania
  • Anil KashyapEdward Eagle Brown Professor of Economics and Finance, University of Chicago