Current Research Topics

The FSA Institute is currently conducting studies and research on the following topics.

  • 1. Measurement of Market Risk

    This study analyzes the measurement methods for market risk in order to obtain implications that would contribute to enhancing risk management in Japan. The main focus is on the market risk measurement framework set out by the Basel Committee on Bank Supervision. It also examines the relevance between the measurement of market risk and other risks.

  • 2. Modeling and statistical analysis of HFT strategies in Japanese stock market.

    We aim to analyze high frequency trading (HFT) strategies in the Japanese stock market. Today, HFT accounts for large trading volumes and its presence can be seen in the equity market. Since it has established specific trading styles in a very short period, understanding the HFT strategies and its statistical features will help to maintain a healthy financial market.

    In this research, we will consider (1) stochastic and statistical modeling of the limit order book and its optimal trading strategy, and (2) statistical features of the strategies focusing on the life cycle of an order in various market environments.

  • 3. Evaluation, Systemic Analysis and Assessment of Introduction of International Regulation

    Theoretical and econometric analysis regarding the macroeconomic impact of the introduction of international regulations in the securities area and the analysis and assessment of systemic risk and emerging risk.

  • 4. Financial Consumer Protection in Japan and Recommendations for the Future: Study taking into account international developments

    This study analyzes the initiatives for financial consumer protection in major countries, taking into account the advanced recommendations developed by the OECD and other international fora on financial consumer protection. It also addresses and assesses initiatives by relevant ministries and the financial industry (e.g., banking, insurance, securities) in Japan, and makes policy recommendations for challenges in this field.

  • 5. Research and Study for Enhanced Cyber Security in the Financial Industry

    This study focuses on the following issues regarding the cyber security measures of the authorities and financial institutions: recent cyber security threats and countermeasures in the financial industry; the level of foreign financial institutions’ security initiatives and the possible gap between that and the level of Japanese financial institutions’ initiatives, focusing especially on the difference in approach for cyber security measures (the difference in allocation of resources such as outsourcing/in-house); foreign supervisory authorities’ perspectives in supervision and inspection; and exercises and other effective measures implemented, including ways for conducting efficient and effective exercises to ensure preparation against cyber attacks.

  • 6. Regional Finance under Declining Population

    While regional financial markets are expected to shrink due to the decline in population, providing continuing and high quality financial services is even more essential for sustainable development of regional economies. This study analyzes how regional banks, as private economic enterprises, could sustain business in the regional economies where business opportunities are becoming limited.

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