Recent research and white papers
GLOBAL ECONOMIC OUTLOOK Q3 2010: GLOBAL SLOWDOWN OR FALSE ALARM?
The global economy is growing but still faces uncertainty about the sustainability of growth in the world’s three biggest markets: the United States, Europe and China. With a disappointing job market in the US, the sovereign debt crisis including the policy response to that in Europe and China’s tightening of monetary policy and efforts to cool an overheated property market are raising concerns about the sustainability of the current market growth. In this quarterly outlook, Deloitte gives insights into the durability of the recovery and the remaining risks in the world’s major markets. Also examined and offered are some rules of thumb regarding the role of fiscal policy amidst economic recovery.
‘Global Economic Outlook Q3 2010: Global slowdown or false alarm?’, Deloitte 2010
Deloitte, 44 pages, December 2010
ANALYSIS OF THE TAX IMPLICATIONS OF UCITS IV
In a joint report of the European Fund and Asset Management Association (EFAMA) and KPMG, significant tax complications are unveiled in the new Undertakings for Collective Investment in Transferable Securities (UCITS IV) directive. According to the authors, the complications prevent the achievement of a harmonised European funds industry. The report identifies critical tax issues and gives numerous examples of discrimination and inefficiencies across the European Union member states. EFAMA and KPMG also give a number of recommendations to make sure that the tax issues are not hampering the efficiency of the single market.
‘Analysis of the Tax Implications of UCITS IV’, EFAMA/KPMG 2010
EFAMA/KPMG, 120 pages, September 2010
LEASE ACCOUNTING CHANGES
On 17 August 2010, the IASB and FASB released a joint report with proposed changes that will change lease accounting for both lessees and lessors by requiring balance sheet recognition of all leases. This report brings up a number of the implications that these suggested changes may have on financial institutions. The authors view these proposed changes as significantly impacting financial institutions and therefore urge organisations to start preparing for the impacts on their organisations right now.
‘What do the proposed lease accounting changes mean for financial institutions?’, Ernst & Young 2010
Ernst & Young, 12 pages, September 2010
FRONTIERS IN TAX: JULY 2010
In this white paper KPMG discusses a number of topics related to tax regulations. The white paper brings up for example implications of the new UCITS IV directive, recovery in M&A activity in some of the Western as well as the Asian markets, VAT as one of the key tax drivers in deal structuring, how to reshape insurance to gain efficiency and the growing focus on risk management. This white paper is one issue in a regularly recurring white paper series.
‘Frontiers in Tax: People thinking beyond borders in financial services - July 2010’, KPMG 2010
KPMG, 68 pages, July 2010
SOLVENCY II SET TO ACCELERATE BROKING MARKET DEVELOPMENTS
Solvency II is a regulatory framework imposed on insurance organisations, but the regulations will also impact brokers for example. The reason is that the demands imposed on the insurance organisations are subsequently creating a demand for more and better quality data from their brokers, suppliers and agents. This in turn is changing the competitive landscape for brokers and challenges them to adapt to a new environment. This article examines the implications for brokers within three main areas: reinsurance broking; direct broking and agency relationships; and captive management.
‘Increasing speed: Solvency II set to accelerate broking market developments’, Forward thinking, PwC 2010
PricewaterhouseCoopers, 6 pages, September 2010
INNOVATION AND DIFFERENTIATION IN THE REINSURANCE INDUSTRY
PricewaterhouseCoopers interviewed 18 senior executives at leading P&C reinsurers in Europe, Bermuda and the US. The focus of the survey was on the threats, challenges and opportunities that have emerged in the aftermath of the crisis. The authors of the report present the findings of the survey and also provide some suggestions on necessary actions for reinsurers. One key result of the survey was that the executives stressed innovation and differentiation as the way for them to remain robust and competitive in the future.
‘The way forward: Innovation and differentiation in the reinsurance industry – the CEO perspective’, Forward thinking, PwC 2010
PricewaterhouseCoopers, 16 pages, September 2010
VIEWPOINT: WHAT'S NEXT FOR THE ASSET MANAGEMENT INDUSTRY?
Ernst & Young prepared a report discussing what action asset managers should take following the recent downturn. The report stresses that long-term planning is crucial, discusses the likely impact of regulation and opines that consolidation is inevitable, particularly among the larger asset managers. Mid-sized firms will feel the most pressure as both consolidation and polarisation squeeze the mid-sized firms from both ends.
‘What now for Asset Management?, Viewpoint, Ernst & Young 2010
Ernst & Young, 4 pages, March 2010
ASSET MANAGEMENT INDUSTRY 2010: IN SEARCH OF STABLE GROWTH
This assessment from BCG gives their take on the global asset management industry, with a comprehensive series of industry and market statistics to bolster their claims. Among these is the fact that the market AUM grew 12% in 2009 to US$53 trillion. However, only 1% of this growth was due to net inflows. The report recommends that asset managers refine their business models, have a plan to deal with regulation and consider M&A.
‘In Search of Stable Growth’, Global Asset Management, BCG 2010
Boston Consulting Group, 30 pages, July 2010
INVESTMENT MANAGEMENT AFTER THE GLOBAL FINANCIAL CRISIS
This position paper from Yale University and the CFA Institute is supplemented with a survey of industry players, review of academic literature and other analyses related to the fallout from the recent financial crisis. The Research Foundation of the CFA Institute asked the authors to research how investors, investment consultants and asset managers evaluated the impact of the crisis on investment management decision-making, strategies, and products, as well as on the investment management industry itself. The authors gathered their information from sources in North America and Western Europe. Key areas touched upon include changes to asset allocation, risk management, cost control and more.
‘Investment Management after the Global Financial Crisis’, CFA Institute 2010
CFA Institute, 156 pages, October 2010
POSITIONING FOR A NEW FINANCIAL LANDSCAPE
The future of the global financial services industry remains uncertain. While the worst of the financial crisis and economic downturn appears to be past, the competitive landscape remains in flux and the debate about regulatory change continues, with few of the fine details agreed upon.
‘Positioning for a new financial landscape’, Deloitte Touche Tohmatsu 2010
Deloitte Touche Tohmatsu, 22 pages, July 2010
FINANCIAL SERVICES 2015: THE CERTAIN AND THE POSSIBLE
This research note discusses the current business climate in the global financial services industry and presents TowerGroup's projections of the state of financial services in three to five years' time. The note offers recommendations on how financial institutions should invest their scarce technology dollars in the interim to keep pace with client expectations and to gain competitive advantage in a time of disruption unmatched in the memory of anyone actively involved in the industry today.
‘Financial Services 2015: The Certain and the Possible’, TowerGroup 2010
TowerGroup, 8 pages, April 2010
THE TOWERGROUP OPERATIONAL RISK ASSESSMENT SURVEY: A FOCUS ON INVESTMENT MANAGEMENT
Asset managers are beset by massive pressures in the wake of the financial crisis. Lower fees, heightened risk sensitivity and invigorated regulatory scrutiny are all weighing heavily on the asset management enterprise. Given the severity of the crisis, it is no surprise that managers are taking a hard look at the way their operations and supporting technology are configured. They are seeking to dramatically lower costs, obtain transparency into risks, and structure operations and technology to be more flexible. This research note presents and analyses data from a survey conducted by TowerGroup in the second and third quarters of 2010 and focuses on the efforts of financial service institutions (FSIs) to mitigate operational risk and improve operations.
‘The TowerGroup Operational Risk Assessment Survey: A Focus on Investment Management’, TowerGroup 2010
TowerGroup, 9 pages, December 2010
RISK AND RECOVERY: PROGRESS, CHALLENGES, AND THE FUTURE OF RISK MANAGEMENT IN FINANCIAL SERVICES
This TowerGroup research note outlines the current state and future prospects for risk management across the global financial services industry. It presents TowerGroup's forecasts of global spending on risk management from three perspectives: the technical side; the traditional credit, market, and operational risk perspective; and the sourcing strategies that financial services institutions will use in advancing their risk management skills. The note also discusses drivers of spending by global region. The report then looks to the future, beyond 2012, at the sea change that risk management will undergo as a result of market and regulatory forces just now coming into view.
‘Risk and Recovery: Progress, Challenges, and the Future of Risk Management in Financial Services’, TowerGroup 2010
TowerGroup, 11 pages, September 2010
UCITS IV: TIME FOR CHANGE. THE ASSET MANAGEMENT INDUSTRY’S VIEWS ON THE KEY INFORMATION DOCUMENT
The objective of these surveys is to ascertain the intentions of the asset management industry and the challenges it faces in regard to:
– The new UCITS requirements related to the Management Company Passport;
– The new Key Information Document that will replace the existing Simplified Prospectus; and
– The restructuring toolkit that allows asset managers to pool their assets by merging their European investment funds on a European basis and/or adopting master-feeder structures.
This document analyses the responses that were received in relation to the Key Information Document (KID). The findings demonstrate that the industry has not yet fully assessed the implications relating to the production of the KID and many requirements surrounding its production are deemed challenging.
‘Risk UCITS IV: Time for change. The Asset Management Industry’s views on the Key Information Document’, PwC/EFAMA 2010
PwC/EFAMA, 24 pages, June 2010
New reports published and information which could be relevant for listing can be submitted for review to: Co-Editor Mette Trier, mette.trier@simcorp.com
