The administration linked closely to citizens' lives, such as welfare, school education, fire defense, roads, rivers, and other social infrastructures, is conducted in most cases by local government. Regional finance therefore plays an extremely important position, so to speak, as one of the two wheels of a vehicle together with national finance. Consequently, the regional finance for fiscal 2008 totaled 83.4 trillion yen, topping the nation's general account of 83.1 trillion yen.
Increasingly important will be the roles of local governments and accompanying financial measures, such as promoting regional decentralization, implementing nursing-care insurance designed for the society with a declining birthrate and ageing, and enhancing regional welfare.

The LPFB ensures funds for local governments through regional financial planning (a set of plans that grasp in general the scale of regional finance, which is the financial complex of various local governments, and balance prospects) to allow local governments to carry their important responsibilities regardless of the regional gaps depending on the degree of population and industrial density and regardless of the gaps in tax revenues between fiscal years due to business trends. Through local allocation taxes and local bonds, along with other means, the AFB ensures funds for the local public bodies.

The annual expenditures of local governments are, as a rule, covered by annual revenues other than local bonds (loans obtained by local governments). However, for expenses for construction projects and other expenses, which should desirably be borne by future inhabitants, or for disasters and other situations temporarily requiring significant expenses, local bonds can be used a fund source. The LPFB drafts a local bond plan for each fiscal year, thereby determining projections for local bonds to be issued and, through agreement on bond making and other clerical work, distributing limited local bond funds.

The LPFB plans and drafts programs, takes financial measures, gives advice, and renders related services regarding local public enterprises.
[Roles of local public enterprises]
Local public enterprises provide projects for waterworks, traffic, hospitals, and sewage, and other services indispensable to the lives of regional inhabitants and to the development of the regions (9,317 projects at the end of fiscal 2006).
[Size of settled accounts of local public enterprises (fiscal 2006)]
The settled accounts of all the local public enterprises total 19 trillion 301.2 billion yen, accounting for about 20% of the settled accounts of the expenditure of the ordinary account of all the local public associations.

Local governments should ideally be financed by their own funds, such as local taxes collected by themselves. However, in reality, fund sources are regionally unevenly distributed. A mechanism is therefore needed for adjusting this uneven distribution and for ensuring general fund sources (fund sources with their uses unidentified and which can be used for any kind of expenses) to organizations with low local tax revenues. Established for that purpose is the local allocation tax.
The local allocation taxes for fiscal 2008 total 15 trillion 406.1 billion yen.

At the end of fiscal 2008, the balance of loans in regional finance reached 197 trillion yen, marking a 2.8-fold increase from fiscal 1991, showing an increase of 127 trillion yen. Under these financial circumstances, the LPFB is expected to draft regional financial plans and engage in other activities, thereby securing the fund sources necessary for addressing such important political challenges as enhancing regional welfare and securing everyday life-related social capital (both of these are challenges facing local governments). While doing so, the LPFB is expected to present a road map for thoroughly saving and rationalizing unnecessary and un-urgent expenses, thereby playing its role as a leader in making regional finance healthy.