Financial institutions are under constant pressure to reduce costs, improve operational efficiency, adapt to regulatory changes and grow their business. NRI believes that a combination financial knowledge and information technology are crucial to the industry’s growth and development. Through our lakyara reports, NRI identifies the various capital markets and IT issues impacting our clients and the future of their business.
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Chinese Capital Markets
Chinese stock brokerages face a war of attrition in the retail market segment, which accounts for most of their operating revenues, amid intensification of competition to capture new customers and undercut rivals with lower commission rates. In response, some securities brokerages have recently started to pursue new business models.
From the perspective of individual banks, the liquidity ratio restrictions now being augmented are only meaningful to the extent that they form part of a comprehensive risk management framework that includes a review of the business lines and business continuity plans. Such restrictions should take into account the unique characteristics of individual banks and national financial systems. We should also remember that the liquidation of assets envisioned in these regulations will result in greater uncertainty. To avert systemic risk, these restrictions need to play a mutually complementary role with the policies by central banks and supervisory authorities, eg (1) macro-prudential policies to prevent the accumulation of problem assets and (2) LLR policies and other crisis measures.
For asset management companies, Asia is a very strategically important region as a home to both investors and assets in which to invest. Japanese asset management companies' future success at expanding globally depends on the extent to which they can become highly competitive as Asian asset managers.