Nomura exec: client clearing scale insufficient outside Japan

Competition is set to intensify for Japan OTC clearing market as Sumitomo Mitsui Trust Bank starts client clearing

Nomura not large enough outside Japan to offer client clearing

Nomura's recent decision to exit the non-Japan client clearing business was due to a lack of scale in Europe and the US, says the firm's deputy chief risk officer Yuji Nakata who warns that regulators need to ensure this business sector can be viable for banks.

The impact of regulation such as the Basel III leverage ratio has caused several high-profile firms to exit client clearing but in Japan the impact of regulation isn't as acute and regulator-driven mandates are creating a captive market.