Japan FSA official says that Nomura still has positions to unwind

Japan FSA says may discuss risk management with Nomura in light of the recent events that unfolded

Nomura and Credit Suisse are the two names to have come out and said that they could incur a significant and material loss from dealings with a US hedge fund, leading to all the ruckus seen so far in risk trades early on Monday.

Nomura said estimated claims against said client was $2 billion – based off Friday’s market prices – and that could change depending on how transactions were unwound.

This won’t likely strike Nomura in terms of financial soundness but it will eat into its performance for Q1 at least – similar to what Credit Suisse pointed out.

The case in point ties back to the Archegos Capital liquidation here.

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Once again, the odds of a systemic risk is rather minimal in my view but market participants tend to ride the train of thought that ‘there is never just one rotten egg in a bad bunch’. But once this passes, expect risk trades to quickly gather their footing again.


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