Derivatives exposures blow-up weighs on Japan banks’ leverage measure
Leverage ratios at Mizuho, SMFG and SMTH hit multi-year lows
Derivatives exposures at some of Japan’s top dealers exploded during the first quarter, dragging their leverage ratios to multi-year lows.
Mizuho Financial Group saw the derivatives component of leverage exposure balloon 41% to ¥16.2 trillion ($123.8 billion) over the three months to March 31, mostly as a result of higher regulatory add-ons to capture potential future exposure, which are calculated as a percentage of notional principal.
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