Japan's leading brokerage firms are re-evaluating the business of selling structured loans to local banks, after Japan's financial regulators announced a comprehensive overhaul of this $67 billion market. A representative of Nomura Holdings said in response to a media survey of 15 investment banks that the company is evaluating practices relating to repackaging Japanese government bonds into loans. Mitsubishi UFJ Financial Group and the brokerage subsidiaries of Mizuho Financial Group are also investigating sales of such products. Currently, Japan's Financial Services Agency is conducting a strict review of such products. In an interview last month, a senior official from Japan's Financial Services Agency criticized local banks for increasing their holdings and repackaged Japanese bond products. Since then, the securities industry has been more cautious. According to Bloomberg Industry Research, although this product complies with Japanese law, concerns about further regulatory scrutiny may prompt both buyers and sellers to suspend transactions, which will put the market at risk of losing liquidity.

Japan's leading brokerage firms are re-evaluating the business of selling structured loans to local banks, after Japan's financial regulators announced a comprehensive overhaul of this $67 billion market. A representative of Nomura Holdings said in response to a media survey of 15 investment banks that the company is evaluating practices relating to repackaging Japanese government bonds into loans. Mitsubishi UFJ Financial Group and the brokerage subsidiaries of Mizuho Financial Group are also investigating sales of such products. Currently, Japan's Financial Services Agency is conducting a strict review of such products. In an interview last month, a senior official from Japan's Financial Services Agency criticized local banks for increasing their holdings and repackaged Japanese bond products. Since then, the securities industry has been more cautious. According to Bloomberg Industry Research, although this product complies with Japanese law, concerns about further regulatory scrutiny may prompt both buyers and sellers to suspend transactions, which will put the market at risk of losing liquidity.