旅立ち

随分と更新を開いてしまったが、この間にキャリアの大きな転換を迎えた。これまで経験したことのないポジションを得た。大手会計事務所から中小規模の事務所に戻ることになるが、よりチャレンンジングで、そして自分のミッションステートメントに近づくことができる。これを機にブログはWordpressに引っ越して、新たに再スタートした。

ロンドンで働く会計士のブログ
https://ytakanishi.wordpress.com

すでに移籍後、３週間が経ったが、毎日が楽しく充実している。これから立ち向かうべき難題、課題、そして可能性を想うと武者震がやまない。

これまでアメブロでの音楽人生から会計士への転換を綴ってきたが、お付き合いいただいた皆様に感謝している。Wordpressでは、より専門ネタが増えると思うが、会計士そしてアドバイザーとして企業や経営者を助けたい、というモチベーションに直結したものにしたいと考えている。

それでは今後も、「ロンドンで働く会計士」をよろしくお願いします。

ラズベリーシティ

Can Pfizer's deal be benefit to Britain?

Note to myself for an article of the Economist about Britain's scientific research.

Pfizer, American giant pharmaceuticals firm earned billions from odd side-effect of heart treatment medicine, by successfully turning into products, called Viagra. Even if it's profit, Pfizer closed most of research lab in Sandwich, in southern England, and released hundreds of jobs.

The giant is bidding for AstraZeneca, which is British second largest pharmaceuticals company. This worries Britons that further jobs for scientist might be lost. AstraZeneca is spending £1.5 billion in research and development. If Pfizer merged the company, the price will be £50 per share, which means £63 billion for the acquisition, and the some of this will be move out from Britain.

In Britain, there are R&D legacy market created by NHS. Coalition government introduced new scheme to protect scientists job by increasing R&D tax credit and creating patent box, which is tax benefit for the company spending in R&D. After the banking cirisis, the government has tried to rebalance the economy away from financial services. The new strategy is not only for pharmaceuticals, but also for manufacturing and agricultural technology.

The boss of Pfizer promised the government that they would keep manufacturing in Britain after successful merger of AstraZeneca. But politicians recalled their bitter memory of another American firm, Kraft's merger of Cadbury in 2010. In spite of the promise by the CEO that they would keep factories in the UK, most of them were closed and jobs were cut. Now the government doubt that interests of Pfizer is rather attractive tax scheme in the UK rather than scientists or products of AstraZeneca.

But there is not many things for politicians to prevent the merger. Instead, they can try to keep scientific research in Britain in addition to tax incentives. Britain's world class universities can work closer to drug industries. These days, most of pharmaceutical firms doesn't have loyalty to particular country. Britain is not doing badly here. In King's Cross, part of north London, huge buildings are under development and academic research centres are gathering into this area.

But there is a hinge. Most of pharmaceutical firms complains the National Institute for Health and Care Excellence (NICE) about their slow process of new drugs. Only 31% of products of Pfizer have been recommended by NICE. NHS also makes clinical drug trial difficult. Due to complicated approval process, the share of drug test of Britain has shrunk and moved out to other Europe countries. Pfizer described 'growing disconnect' for the gap between the government's ambition and it's action.

Securing future scientific research requires mixture of tax incentives and building stronger pipe between university and firms.

Danger of shadow banking

Note to myself for an article of the Economist about shadow banking.

Governor of the Bank of England and head of Financial Stability Board (FSB) reckons the greatest danger for the next financial crisis would be shadow banking in the emerging markets. Shadow banking is huge and fast growing but with little understood. It is powerful and good tool but also potentially explosive with careless management.

FSB defines shadow banking as lending by institution other than banks, and the scale of shadow banking is considered as a quarter of global financial syste. The total assets has been grown by $26 trillion in past decade and reached $71 trillion. In China, the speed in growth of shadow banking is much faster.

Orthodox banks are still struggling with losses incurred in the financial crisis, and pinned down by regulation and demanding requirement with endless legal troubles. In America, investment banks are no longer allowed to trade on their own, but only on behalf of their clients.

Most of people are not so worry about the function of shadow banking. For example, if Google provide financial service to people, such services would be welcomed. But problem is credibility. There are good thing in lending outside of the banking system. Banks are heavily regulated for some reasons. Usually they have large gap between borrowing with short period and lending with longer period. This gap creat enormous leverage with fragility. When this get into trouble, banks are bailed out by tax payers. Lending outside of banks is less dangerous when the system is not so complecated.

Some firms might enter into long-term loan agreement with pension fund or life insurer instead of bank. If some issue happens on the loan, simply the creditor will lose money and no significant impact spill out as far as there is no complicated structure.

But if shadow banking is not properly regulated and controlled, this can be dangerous. In the financial crisis, these were part of 'structured investment vehicle'. Legal entities were set up by banks to sell loans. These entities were notionally independent, but they were still part of the mechanism of banking and when issue incurred all these got into trouble. The lesson told us that shadow banking had also big gap in the maturities between the borrowing and lending, and not enough capital for losses. These shadow bankings were solely created to take advantage of less regulatory.

Now banks are required to create structured investment vehicles on their balance sheet. Money market funds must be secured by more liquid assets. Limits on leverage are also imposed on these shadow banks. But more danger lies in China. Where there are restriction in expansion in lending, banks are offering higher returns by creating shadow banks. It appears unrealistic that unprofitable steel mills companies or overextended property developers can pay off their loan. Yet investors are keen on throwing their money in as they believe their investment will be protected by bail out.

China's government will use state-owned banks to fund these shadow banking in case of trouble. But the costs will be tremendous. If the regime should clearly spells out which assets are protected, the investors will become cautious about the risk. Shadow banking can be safer function only if the risk and scope of protection is clearly understood.

Struggle in mergers between law firms

Note to myself for an article from the Economist about vereins of law firms.

Mergers between large law firms has not been fruitful. Even it seems still hard to see synergetic outcome. Report on April 2014 highlighted disappointing performance in 2013 of 'six giant alternatives'. America's top 15 firms by revenue have been created by mergers in past decade. But their profit per partner (ppp) has fell by 8.2% in spite of 2.7% rise in rest of 94 in top 100 law firms in the country.

Norton Rose Fulbright and Dentons born last year in mergers faced difficulty as the profitability has been dragged down by foreign firms with far less lucrative. This is clear reason for the above fall of ppp. But big advantage of global alliances is far to materialise.

Vereins can't attribute their under performance to global dilution. White & Case which is not verein achieved their ppp of $1.9m despite 58% of revenues are abroad while DLA Piper which is most profitable verein barely had $1.3m. It appears that size of vereins is not driving factor for their business in terms of economies of scale. Most profitable strong lawyers are half size of vereins DLA Pipers and Baker Mckenzie.

An explanation of such disappointing outcome is that most of joiners in the alliances doesn't have leadership but they are interested in becoming a part of global giant. But a boss of one of revreins says there is no magic to be profitable from beginning and it's not the structure but they should be in the market where there are clients who are prepared to pay to them.

Some vereins' doubters reckon that the compensation system discourages lawyers from collaborating across the countires. Refer work are already in different profit pool. The reward has been already drawn. When the more alignment in the remuneration system are made, there are greater chances to provide wider services to the client.

Most of lawyers in verein says they have been seamlessly integrated but their rival vereins are merely operating 'franchise model'. This is simply wrong.

Doubt in superpower of deterrence

Note to myself for an aritcle of the Economist about doubt in America's superpower.

America's president betrayed his frustration of decay in America's superpower. Mr Obama won his presidency by channeling the people who had tired with costs of blood and treasure in Iraq and Afghanistan. Now 52% of American want their country to focus on their own business, which is highest portion in the past five decades. The world perceive America's reluctance in it's role of world's police.

Even the most exposed alliance for America is in doubt. For decades, America has guaranteed peace in far east, which underpinned Japan's diploma. But Mr Obama had to reassure that America's intervention in case of Senkaku's turmoil. After his indecisive ways in Libya and Syria, America's attitude toward policing the Middle East has been in question.

Deterrence always has contained hint of doubt and the doubt spread quickly. Already regional powers are attempting to dominate their neighbours. China increasingly claims more territories in aggressive way. Russia is conspicuously interfering other contries. If next door is arming and no superpower's protection can be expected, better arms are necessary. Also, many leaders will be studying from Mr Putin how to expand their territories.

International norm of direction to freedom will be weakened. Global free trade and lower cross-boarder pollution will get harder to be achieved. It is understandable that America would be irritated by ingratitude of world which enjoys protection by America. But America themselves are also enjoying the privilege of domination in infrastructure of operation systems.

The critics that reckon all blames should be down to Mr Obama are wrong. America could never maintain the level of global dominance at the point of collapse of Soviet Union. But current president is still in difficult situation getting worse in two ways.

First, he has broken the fundamental rule of deterrence by superpower. In Syria he pledged that he would punish Bashar Assad if chemical weapons were used, but no action was taken in spite of it's proof. He excused non-participation of Britain and needs of Russian gas by European. But this was taken as message of weakness. Second, he has trusted diplomatic coalitions of willing with like-minded democracies but he failed to build up the coalitions. This was lead to concessions with inattentive friends such as Iran and Russia.

Credibility is easily lost and hard to rebuild. America is still unrivalled military armed. In past few years, the most of South East Asian countries have move toward to America seeking protection from China. But as long as West is careless of their increasing risks and relies on America's security without paying, vanquishing can be hardly obtained.

When Mr Obama won his presidency, the world was wondering how to tame America, but now he and his country need to be aware that the question has changed since then.