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
In China, stricter regulation of banks' on-balance-sheet lending has paradoxically increased the overall economy's financial risk as banks have increasingly engaged in circumventive financing through use of off-balance-sheet products.
The JGB trade settlement cycle was shortened to T+2 effective from April 23, 2012. In October 2012, a securities industry working group began to work toward the ultimate goal of T+1, the global standard.
Reaching this goal will entail substantial costs, which are the biggest concern. Realization of T+1 will require a cross-industry approach based on recognition of the significance of T+1 relative to the cost.
This year, the Japanese FSA will upgrade its EDINET corporate disclosure system and expand the scope of XBRL disclosure in Japan.
XBRL disclosure systems are widely used overseas also. A case in point is the Taiwan Stock Exchange, which has undertaken various XBRL initiatives to gain favor with institutional investors, including foreigners. Its initiatives are instructive for Japan.