Banks are the biggest owners of cross-held shares.
It's a newly legislated accounting standard whose impact on the Japanese stock market has caused concern. Since last April, listed companies have been required to report assets for trading purposes at market value. Japan's keiretsu are typically interlocked by these arrangements. Cross-holdings have traditionally provided companies with a base of stable shareholders, preventing takeovers and shielding management from shareholder pressure. This has contributed to Japanese companies' relatively low emphasis on dividends, shareholder meetings, and investor relations in general.