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NewswireToday - /newswire/ -
Singapore, Singapore, 02/03/2010 - As the banking world attempts to recover from the recent crisis, PWC Director of Risk, Tsuyoshi Oyama, outlines effective risk management strategies that will help to prevent the re-occurrence of such disasters.
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The many regulatory reactions and industry reports to the recent market turmoil seem to evoke a sense of déjà vu, with most plagued by the silo-approach, discussing only specific issues independent of other important issues. They also tend to be silent on the problems of the regulator to be addressed, after the turmoil.
Written by Tsuyoshi Oyama, a leading expert with Bank of Japan before and now with PricewaterhouseCoopers, the new book “Post-Crisis Risk Management: Bracing for the Next Perfect Storm” brings a comprehensive and integrated approach to examining the causes of the global financial crisis, and takes a fresh perspective to risk management frameworks in its aftermath. The book argues that past reactions to crises are inappropriate in the new world of finance.
Based on the author’s experience as a regulator who had been deeply involved in the discussion of international bank regulation up to recently, Oyama identifies four primary issues that need to be solved: An inappropriate use of risk-expressing techniques such as VaR and stress testing for risk communication; the regulatory and supervisory authorities’ vague stance on the degree of stresses to be assumed by financial institutions; the financial institutions’ and regulators’ insufficient analysis of root causes of crisis; and the lack of incentive mechanism to discourage financial institutions from generating financial bubbles. The book then proceeds to outline the critical macroprudential and microregulatory policies that will help prevent the re-occurrence of such financial disasters in the future. The book also emphasizes the importance of “Asian” initiatives in establishing a new global standard in banking regulation.
The author remarks, “This crisis has thrown up various policy challenges that we must now overcome. These challenges are neither limited to the area of macroprudential policy, nor to how we should deal with a financial bubble. They also include risk management issues for individual banks. In addition, the crisis has forced us to ponder over the design of regulatory systems to ensure the proper supervision of all financial institutions, including non-banks.”
About the Author
Tsuyoshi Oyama has been a Director for Risk and Control Solutions at PricewaterhouseCoopers Aarata in Tokyo since September 2008. Before that, Oyama worked for more than 20 years at the Bank of Japan (BoJ), most recently as Deputy Director-General in Financial System and Bank Examination Department. In the BoJ, he conducted several projects to deal with Japanese banks’ non-performing loans (NPL) problem and recently led Basel II implementation in Japan, including Pillar 2 (economic capital management), IRB and AMA. Up to June 2008, he also served as member of several sub-committees under the Basel Committee on Bank Supervision. From 1994 to 1997, he was seconded to the Policy Development and Review Department of the International Monetary Fund (IMF). He is Co-Regional Director of Global Association of Risk Professionals (GARP).
About Wiley
Founded in 1807, John Wiley & Sons, Inc. (wiley.com) has been a valued source of information and understanding for over 200 years, helping people around the world meet their needs and fulfill their aspirations. Since 1901, Wiley and its acquired companies have published the works of more than 400 Nobel laureates in all categories: Literature, Economics, Physiology/Medicine, Chemistry, Physics and Peace.
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