Shaken by Greece and China

Global Risk Watch Vol.4 July 2015

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

◆Shaken by Greece and China 
Tsuyoshi Oyama, Partner/Head of Center for Risk Management Strategy at Deloitte Touche Tohmatsu LLC

A tumultuous month has passed. The turmoil in Greece and the collapse of the Chinese stock markets have overshadowed the recent recovery in the advanced economies, thereby changing the tide of world economies from a risk-on to a risk-off trend. The market appears to be regaining its composures thanks to the approval of austerity measures in the Greek Parliament, and desperate stock price-keeping-operations (PKO) by the Chinese authorities (as of July 16th). The question remains, are these ‘shocks’ sparked by Greece and China just a transient effect or will they have longer lasting repercussions?

For more information, please download from the left


Overview of Development in Financial Regulations

◆Authorities’ Stance on Conduct Risk became more and more clear 
Koichi Iwai, Senior Manager, Center for Risk Management Strategy at Deloitte Touche Tohmatsu LLC

Looking at recent regulatory developments, we could see how cautious regulatory authorities are against conduct risk (misconduct) and foresee the coming regulatory/supervisory framework to control the risk. Authorities recognize problems and inherent risks of misconduct from both micro and macro-prudential perspectives. Therefore, regulators acknowledge various measures are needed to address the conduct risk in financial sector. The countermeasures by regulators seem to consist of five pillars.

Please download from the left to find the details regarding the five pillars


Highlight of Indicator for this Month

◆The UTokyo Daily Price Index: Rising price of Household and Miscellaneous Goods 
Yasuhiro Sobue, Senior Staff, Center for Risk Management Strategy at Deloitte Touche Tohmatsu LLC 

UTokyo Daily Price Index is produced by Tsutomu Watanabe (University of Tokyo) and Kota Watanabe (Meiji University & University of Tokyo) based on the information gain by the POS (point-of-sale) system at approximately 300 supermarkets that record sales results of products (food, beverage, household goods, etc.), which provides the daily inflation rate with only a three day lag. The index covers 17% of the official CPI in terms of consumption weight published by the Ministry of Internal Affairs and Communications. 

Please download from the left to view the graph and commentary


Seminars & Outside lectures

◆ The Institute of Financial Risk management and Audit (IFRA) ‘Building a Global Risk Appetite Framework and Enhancing Stress Testing’ (Held on June 25th, 2015)

Tsuyoshi Oyama (Head of CRMS), Shigeyuki Goto (Director), Koichi Iwai (Senior Manager), Takayuki Sato (Manager), Yasuhiro Sobue (Senior Staff) participated as guest speakers.

>>Detail Information(Japanese,PDF)

◆ (Preliminary Report) Basel Regulations / Overview of Consultation Paper on  ‘Interest Rate Risk in the Banking Book (IRRBB)’ (Held on July 1st, 2015)

On June 8th , the Basel Committee on Banking Supervision (BCBS) published consultation paper on‘Interest Rate Risk in the Banking Book (IRRBB)’, which propose a significant changes of its framework. Interest rate risk in the banking book has become a core risk along with credit risk for the Japanese financial institutions. The impacts are imminent should the banks become subject to capital adequacy requirements. Taro Asai (Senior Manager) and Naoya Iino (Manager) explained the key changes. 

◆Deloitte Tohmatsu Risk Management Seminar 2015 <Summer> (Held on July 22nd, 2015)

This summer seminar is hosted by Deloitte Tohmatsu regarding themes responding to critical risks such as overseas subsidiary management, data governance, GRC, risk intelligence, etc. Tsuyoshi Oyama (Head of CRMS), Kiyotaka Sangu (Manager) presented ‘Using Risk Intelligence to set Management Strategy’ as the guest speakers.

>>Detail Information(Japanese)

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