On the market risk involved in the public financial system in Japan: a theoretical and numerical investigation

Article Abstract:

A study sought to assess the market risk involved in treating the postal savings system and the fiscal investments and loans program as integrated financial institutions, as in the case of Japan. Findings show that the present rule for determining interest rates on the postal savings account reflects the values of the options embedded in both assets and liabilities. However, the study also warned that the system would have the tendency to involve high market risks on account of the flexible options. Specifically, as anticipation of early withdrawal becomes keener and as spot rates increase, the duration of liabilities becomes very short.

Regulation and Administration of Communications, Electric, Gas, and Other Utilities, National Government Finance, Postal Services, Japan, Economic policy, Public finance, Postal service, Postal savings system, Postal savings systems

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Interest withholding tax changes

Article Abstract:

The Australian government introduced a new legislation whereby entities to pay withholding tax could not circumvent the law by claiming they are tax exempt in order to lessen incidence of tax avoidance schemes. The new law focuses on the expansion of the definition of "interest" or tax purposes. The term "interest" now covers interest; amounts in the nature of interest; amounts received in exchange for interest under a washing arrangement; and amounts to the extent that they are in substitution for interest.

Tax Law, Employee Withholding Taxes, Analysis, Interpretation and construction, Australia, Taxation, Withholding tax

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