While we all are facing the pinch of economic uncertainty there are some positive signs that are slowly emerging. Although in my mind, we are not out of the woods yet. In this part of the world, there have been interesting developments in India’s and China’s economy.

On the other side of the world, it is the legal battle that SEC (U.S. Securities and Exchange Commission) has been having with white collar crimes. Let me share my views as to why this is something we as CFOs should be focused on and why it might have Implications on your business here.

Let’s start with the other side of the world – the interesting case of SEC vs. Tourre. Fabrice Tourre, a not so senior bond trader in Goldman Sachs was implicated by the US court. He was recently found liable for intentionally misleading clients that he served.  His Fraudulent Activities involved the sale of “sub-prime” mortgage backed securities worth nearly USD 1 Billion that became worthless post financial crisis.

The Tourre’s case has received wide print and online media coverage. What’s more interesting is that it took SEC more than 5 years to hold an Individual legally accountable for contributing to the mortgage crisis despite the fact that many of the banks had already settled with SEC on cases relating to the mortgage crises. Even though, Tourre isn’t a high level executive in his Organization, the message is very clear; regulators are not only going after organizations but all and any individual involved in fraudulent activities. The lesson for CFOs here is that, now regulators are flexing their muscles to go after individuals regardless of their level in their organization. So we as guardians of the financial well being of our organizations had better comply with all relevant regulations or else…

Now closer to home, let’s talk about the recent events in India and China that are giving me nothing but goose bumps. These recent events may have both positive and negative implications but in the longer term, these economic news from both countries do not signal healthy growth.

The first half in China was the slowest we have seen in last two decades but numbers from July indicate a small recovery in both business expectations and non-manufacturing PMI (Purchasing Managers Index). This seems to be largely a result of financial prudence that is being driven through the change of leadership in China. So while it might hurt world economy in shorter term. But this fiscal correction to reduce bad loan exposure in China is something bound to come only time will tell if this adjustment is going to be a hard or soft one. Keep an eye on social implications with the divide between the rich and poor being the widest it has ever been.

On the other hand, India has not seen its currency go through such a drastic devaluation from 42-45 to 1 USD range from last year to almost 60 to 1USD in recent months and with a call for it to go to as low as 70 to 1USD. This is largely driven by its insatiable demand for USD due to import-export balance.  But its poor infrastructure, structural and political reforms are fueling this devaluation fire.

Countries like the Philippines and other BPO based economies will not take pleasure from this, as it will make Indian BPO industry a lot more attractive. All of us could be myopic with this short-term implication. But weakness in currency demonstrates a weakness in underlying economics of the country so we should be worried. With ASEAN nestled between India and China, we need both of these economic engines to be working strong to act as an effective business channel to improve economies in the region.