Article

The curious strength of emerging economies

Global Risk Watch Vol.31 October 2017

Risk intelligence e-Newsletter provides an overview of various corporate management risks from a global perspective featuring key events that occurred over the past month and need to be carefully examined for risk management purposes. The Center for Risk Management Strategy (CRMS) as part of the global Deloitte Tohmatsu Group provides you with experienced analysis on risk management and financial regulation.

Overview Macroeconomic and Financial Risks

# The curious strength of emerging economies
Tsuyoshi Oyama, Partner/Head of Center for Risk Management Strategy(CRMS) at Deloitte Touche Tohmatsu LLC/Deloitte Asia Pacific Risk and Capital Management Leader 

All around the globe stock prices remain sky-high.
Particularly in the US, we are seeing historically high stock prices continue to climb.
Even in Japan, stock prices have attained a twenty one year high level of JPY 21,000.
The strong global economy, in particular the US economy, is one of the reasons for the current bull market, but so also is the fact that prices have not yet shown any sign of rising in the US.

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Overview of Development in Financial Regulations

# The “last few meters” towards an agreement; the Basel III reforms
Shiro Katsufuji, Director, Center for Risk Management Strategy at Deloitte Touche Tohmatsu LLC

Final agreement on the Basel III reforms has again been postponed.
BCBS members had concluded their discussions late last year on the “denominator” part of Basel III reform including measurement methods for operational and credit risk, and the final draft appears to be ready.
The only issue left open is so-called “output floor (capital floor).”

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(PDF, 287KB)

Highlight of Indicator for this Month

# Rising wages pushing inflation acceleration
Toshikazu Kumagai, Senior Staff, Center for Risk Management Strategy at Deloitte Touche Tohmatsu LLC

Currently in the US, the expansive average hourly wage hikes are grabbing attention.
September's average hourly wage was up +2.87% YoY, making this the highest growth rate since 2009.
In addition, July and August's data have been revised upward.
Wages have also been rising against the inflation rate, showing bolstered consumer buying power – which may consequently cause a rise in consumer spending.

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(PDF, 477KB)

Seminars, Conferences & Publications

【Seminars】

# 2017 Deloitte Executive Forum - Risk Transformation: Asia's opportunities in cyber, third party, and regulatory risk management  (December 13, 2017 / Peninsula Hotel Tokyo) 
Center for Risk Management Strategy (CRMS) of Deloitte Touche Tohmatsu LLC is hosting an executive forum on risk management practices in Asia Pacific. Leaders of our global member firms will gather and discuss pressing topics, including how to streamline model risk management to reduce reporting costs, how to manage cyber security challenges, and market conduct as it pertains to benchmark rates. 

 

【Outside Lectures & Conferences】

# Symposium on Building the Financial System of the 21st Century: An Agenda for Japan and the United States (October 21 - 22 / Odawara) hosted by Harvard Law School Program on International Financial Systems (PIFS) 
Tsuyoshi Oyama joined a panel discussion on international financial regulation as well as facilitated a group session. 
 

# Financial Risk Management forum 2017 (October 26, 2017 / Tokyo) sponsored by JTB Communications Design 
Tsuyoshi Oyama will be presenting “ the trend in international financial regulations and strengthening the risk management for emerging markets” at the “financial risk management forum 2017” sponsored by JTB Communications Design. 

 

【Other Activities】

# Deloitte CFO Signals Japan : 2017 Q2 - How CFOs/CFO organizations engage with cloud computing and AI *Only available in Japanese
Deloitte has conducted the 8th regular survey on CFOs in Japan.
This survey analyzes the change in awareness of CFOs in a chronological order and the latest outlook in the “survey items on the economic environment” section.
It also investigates the awareness on risk scenarios of Japan and major countries from a macroeconomic perspective.
This issue’s hot topics include how CFOs/CFO organizations engage with cloud computing and AI (survey period: July 3 to 14, 2017).
CRMS has contributed to the observation and analysis part of the survey.
 

# ”Brexit Impact from a Macroeconomic Perspective ” available online *Only available in Japanese
CRMS provides timely information on the impact and key aspects of Brexit from a macroeconomic perspective on the special website of the Deloitte Tohmatsu Group.

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