| Top risks |
Primary risk control measures |
| Risk event |
Risk scenario |
| Resurgence of inflation and economic slowdown in the US and Europe |
- Cooling of the economic climate, with demand in decline as the impact of high interest rates becomes more pronounced; concurrent resurgence of inflation driven by rising resource prices as geopolitical conditions worsen
- Expansion of market-related losses and increasing difficulty of foreign currency procurement as a consequence of further interest rate rises in the US and Europe; tightening of the fiscal environment, triggering an economic slowdown and increase in credit costs and RWA
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- Credit risk: Monitor real estate-related credit conditions in Japan and internationally, and conduct trial calculations of the impact of changes in monetary policy in Japan and emergence of geopolitical risk
- Market risk: Conduct sound risk monitoring and dynamic reviews of investment policies associated with rising US interest rates
- Foreign currency liquidity risk: To ensure early detection of shifts in the global environment, conduct multifaceted daily monitoring through foreign currency liquidity stress tests using early warning indicators and currency- and location-specific data, and pursue continued improvement thereof
|
| Rising prices, interest rates, and expanding fiscal concerns in Japan |
- Rising prices as a consequence of resource price increases, talent shortages, and the weak Japanese yen, leading to sluggish consumption rather than a positive cycle of wages and prices; concurrent raising of interest rates and slowdown of the economy
- Increased credit costs and worsening market-related losses resulting from economic slowdown and interest rate rises in Japan; consequent rise in interest payments on government bonds, heightening financial concerns.
|
| Escalating US-China conflict and sluggish Chinese economy |
- US-China conflict reflecting economic security and human rights and the Taiwan situation in the context of growing global instability, restraining investment in China and nearby regions and obstructing continuous economic growth
- Credit-related expenses increasing through worsening corporate performance with the stagnation of the Chinese economy due to the delayed response to the prolongation of the real estate market slump, excessive debt, and other structural problems
|
| Global decoupling and growing geopolitical risks |
- Acceleration of global decoupling and destabilization of the international order with conditions worsening in Ukraine and the Middle East, countries sharpening their "own country first" stances, and public sentiment inflamed by the spread of misinformation, leading to heightened military tension in each region of the world
- Downward pressure on growth potential of the global economy and profitability of companies due to disruption of supply chains and obstacles to the international business development of global companies
|
| Worsening impact of climate change |
- Increasing climate-related risks due to delayed response to climate change by each country and company, the return to coal-fired thermal power, and the loss of nature, leading to stricter regulation and supervision of financial institutions
- Loss in corporate value attributable to increased criticism from insufficient efforts by the Mizuho group to respond to environmental and social issues such as loss of nature, and to manage transition and physical risks
|
- Formulate plans for climate-related risk management
- Implement risk control of carbon-related sectors
- Monitor regulatory trends, trends at other banks, and other main changes in the external environment
- Revise our Environmental and Social Management Policy for Financing and Investment Activity
|
| IT system failures |
- System failures resulting from factors such as human negligence, hardware failures, or disasters causing wide-spread inconvenience or disadvantage to customers and damaging trust, leading to the loss of business opportunities
|
- Framework for the firm establishment of initiatives to prevent system failures and strengthen response capabilities, and further measures for enhancement
- System risk monitoring from multifaceted perspectives
|
| Cyberattacks |
- Attacks by specific countries for intelligence activities or sabotage, by criminal or terrorist organizations for monetary demands, or through the malicious use of AI, that result in suspension of services, exposure of information, and/or unauthorized fund transfers, causing wide-spread inconvenience or disadvantage to customers and damaging trust, leading to the loss of business opportunities
|
- Promote the sophistication of cybersecurity management systems, including those of the group, the global, and third parties, through measures such as identifying vulnerabilities, strengthening monitoring systems, strengthening incident response capabilities, and developing governance systems.
|
| Money laundering / Financing of terrorism |
- Financial services being misused for criminal acts, resulting in criticism from the international community, damaging trust with customers and with other financial institutions, and leading to the loss of global business opportunities
|
- Improve the ability to grasp risk conditions, strengthen risk mitigation measures for high-risk customers, products, and services, strengthen the control system for offices outside Japan, and otherwise promote upgrading of the structure for countermeasures to money laundering, etc.
|
| Improper acts and omissions by executive officers/employees |
- Damage to trust and loss of business opportunities stemming from criticism accompanying the occurrence in or outside Japan of legal/regulatory infractions, business operations that are not customer-oriented, and other improper acts and omissions that are not consistent with the social responsibility and duty sought by the Mizuho group, or out of line with social norms
|
- Analyze the causes when an incident occurs and formulate improvement measures
- Enhance predictive management toward reducing instances of misconduct
|
| Stagnation of sustainable growth due to talent shortages |
- Decline in human capital due to outflow of talent in a more active labor market, slump in recruitment as the working-age population declines, and delayed cultivation of specialized talent, leading to inadequate talent portfolio development
|
- ⃝Promote efforts to improve employees' sense of fulfillment through reducing long working hours and career development support, and strengthen recruitment from outside the company
- Revise the definition of human capital risk and improve monitoring methods for the management of human capital risk
|
| Changes in the competitive environment |
- Changes in the competitive environment due to the emergence of new services along with deregulation and technological innovations such as the use of generative AI, the entry of companies from other industries, and the changing needs of customers with heightened awareness of sustainability, damaging the Mizuho group's business foundations
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- Strengthen talent development, formulate AI ethics policies toward the utilization of AI, and establish governance systems
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