The decisive policy response of major financial authorities has eased the turmoil in financial markets caused by the economic shock of the COVID-19 pandemic, but the central bank’s balance sheet has expanded to an unprecedented scale. Corporate cash flows are worse than what can be seen from the statistics, and there is still a strong movement to secure cash on hand. The balance of guarantees by the Credit Guarantee Association has already exceeded the level of the 2008 Global Financial Crisis(GFC), and banks are increasing reserves for bad debts as the nation is engulfed by the third wave of coronavirus infections. Amid increasing uncertainty about the future, a series of government-led policies for the realignment of local banks have been announced, and a realignment of the system of local banks, which has long consisted of 64 regional banks, is in progress. A multifaceted examination of the degree of “financial excess” reveals regional differences in the degree of overbanking. If current trends continue, the financial excess will increase nationwide in 10 years, except in the major metropolitan areas. Based on past cases, the realignment can be expected to have a cost-cutting effect, but it is unlikely to be a fundamental solution for improving profitability. Collaboration with different industries is gathering momentum, with initiatives going beyond just realignment to improve profitability and diversify profit sources indispensable.