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  4. Feb. 2012

Capital Markets & IT -lakyara

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.
*Organization names and job titles are current as of the publishing dates

Feb. 2012

Capital Markets

The BOJ’s price stability goal -rhetoric and practice

Tetsuya Inoue

In contrast to the previous “understanding,” “goal” implies the BOJ’s intention to hit a target.Whether it leads to formal inflation targeting will depend on such conditions as the public consensus on a desirable inflation rate, the operational independence of the central bank, and the consensus on the causes and costs of inflation/deflation. Moreover, an emphasis on the substantive actions of the BOJ could undermine the significance of collective decisions at the MPM. As an initial step under the new “goal,” an increase in JGB purchases may be a signal of policy commitment and/or a message to the forex market.

IT & Operation

XBRL could potentially improve efficiency of shareholder voting

Chie Mitsui

Voting by institutional investors is seen as a promising means of monitoring corporate governance and enhancing investee companies' value, but institutional investors face time and cost constraints in exercising their voting rights. Greater use of electronic disclosure of corporate information should improve the efficiency of shareholder voting and facilitate decision-making on important shareholder resolutions.

Financial Infrastructure

How far will the JGB settlement cycle ultimately be shortened?

Yoshiyuki Kiwata

The JGB settlement cycle for outright transactions will be shortened to T+2 from April. The JSDA has set a target of ultimately moving to T+1 settlement, but many issues remain to be resolved before T+1 becomes reality. Continued discussion and educational activities are needed.