The Debt Ceiling, Summitry, and Corporate Governance in Japan...or just follow the money

Join hosts Lucy Marcus and Stefan Wolff for a deep dive into some of the most pressing issues of today and tomorrow.

In this episode of Navigating the Vortex, Lucy and Stefan talk through the continuing impact of the potential US default; the regional and global summits that tell us about China's growing influence in Central Asia, Ukraine's diplomatic efforts, G7 concerns regarding China; and how money is the glue that ties the threat of default by the US government, the recent banking sector crisis, and Japanese corporate governance together.

Too late to avoid the consequences of a potential default?

Lucy and Stefan begin with an update on the potential US default and the ongoing negotiations to raise the debt ceiling. They talk about the geoeconomic consequences of a default and the credit rating agencies' concerns about political partisanship hindering a resolution.

Summit-palooza

Then it is on to recent and upcoming regional and global summits. Stefan talks through China's Belt and Road Initiative and its economic and political influence in Central Asia, the runners and riders embracing China's investments, as well as where the war in Ukraine, President Zelensky's diplomatic efforts, and support from Western partners fit into all of it.

Lucy and Stefan delve into the G7 summit particularly regarding its focus on China and concerns about economic resilience and security. They highlight the implications for the private sector, such as evaluating equipment, protecting advanced technologies, and considering foreign investment strategies.

Coming up, there is more summitry to be had with the Nato foreign ministers meeting, the European Political Community gathering, and the 25th anniversary of the European Central Bank—Lucy and Stefan will brief you on key issues from these summits as and when they arise.

The hum of instability, both economic and political, balanced by borderless money

Lucy and Stefan outline some of the threads of the interconnectedness of geopolitics and geoeconomics, drawing together the threat of US default, the recent banking sector crises, and corporate governance issues - this time looking at Japan.

Above all else, they emphasize the fragility of global economic stability and the importance of vigilance.

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Deeper Dive

As promised in the podcast episode, here are links to several items mentioned for those who’d like a deeper dive:

Stefan and Lucy first discussed the potential impact of a US debt default on the global economy several weeks ago. Starting with an explanation of what the debt ceiling actually is, they talk through severe consequences for the US economy and that a US default would have significant global consequences due to the US's central role in the global economy and financial system. Here is that episode:

Stefan mentioned a webinar that he co-organised with the Foreign Policy Centre in London, where he is a Senior Fellow. The video of the webinar “The impact of the war in Ukraine on connectivity in Eastern Europe and the South Caucasus” is below.

Lucy mentioned a piece she wrote, The Better Corporation, about the forced transformation of corporate governance in Japan, prompted in no small part by international investors expecting Japanese companies to adhere to universal principles of good corporate governance.

Also, this link takes you to a collection of all of the columns on corporate governance on Navigating the Vortex.

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