Daily Market Update - September 29, 2014

Japanese disaster highlights risk from volcanoes… New report shows increase in regulatory risk… Australia criticized over climate change stance…

Risk Management News

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Japanese disaster highlights risk from volcanoes

The eruption of a volcano in the centre of Japan and the unconfirmed but highly likely death of at least 31 hikers has brought the risk from volcanic eruption into the headlines over the weekend. Officials say the eruption was sudden and unexpected and the likelihood of further eruptions has halted recovery of the bodies. Lava is not the only issue with ash and poisonous gasses providing huge hazards for anyone caught up in an eruption and those trying to rescue potential survivors. The US Geological Survey says that there are around 1500 volcanoes in the world that are considered ‘active’ including 169 in the US, mostly in Alaska but also Hawaii. Even dormant volcanoes can be hazardous though and there is expert advice available for those living in areas that could be affected. Find out more about volcano hazards.
 
New report shows increase in regulatory risk

Financial services think tank JWG has published its analysis of 131 regulatory bodies in the G20 nations and a total of 50,000 documents that they have produced in the last 5 years. The report shows that the “volume, pace and complexity of deciding how to comply with a continually evolving regulatory agenda is staggering.” The analysis reveals that by 2020 the page count of regulations for the financial industry will be “three Eiffel Towers high” and that 54 per cent of the major legislation this year was on topics unforeseen 5 years ago. Fines have topped $260 billion it says. Rather than survive on management by regulatory deadline, audit points and lots of human intervention, JWG found leading firms to be moving towards a comprehensive approach for regulatory risk management which allows them to use the regulatory changes for competitive advantage.
 
Australia criticized over climate change stance

The UN Climate Change Summit was attended by hundreds of world leaders and business decision makers and some consensus of agreement was found in even some of the most unlikely bedfellows. However one of the developed nations that has come in for criticism is Australia. Prime Minister Tony Abbott was not a meeting on Tuesday in which President Obama appeared to refer to Australia and Canada when he noted that every nation had to play its part. Both nations are dependent on mineral exports. While China has now committed to reducing its emissions rate by 45 per cent by 2020, Australia is sticking to its 5 per cent reduction in greenhouse gases. There is of course a huge difference in the levels of gases produced by China and Australia but many expect Australia to be leading by example. Read the full story.

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