What lies beneath: Nomura’s iceberg balance sheet

Collateral received by the Japanese bank exceeds its total on-balance-sheet assets – does it matter?

Early last year, before Covid-19 turned markets on their heads, a senior economist at the International Monetary Fund was analysing the off-balance-sheet financing activities of large global dealers.

One firm in particular stood out. The total amount of securities collateral received by Nomura exceeded its total balance sheet, and had done for the previous three years. More than 80% of this collateral was repledged or sold on in other transactions, much of it without being recorded on the