Norinchukin Bank, part of the Total NorinchukinGroup with over JPY60 trillion (USD470 billion) in assets, plans to start trading credit-default swaps by year-end. "We'll look to put on proprietary positions," said Michimasa Soga, senior manager of the derivatives and fixed-income department in Tokyo. Soga said the bank will probably start small, putting on a few trades at a time on Japanese credits. He declined to comment on the potential size of the trading book for default swaps. Currently, the department trades bonds and interest-rate derivatives.
"They're one of the strongest banks in Japan," said Jason Rogers, director of credit research at Barclays Capital Japan, adding that Norinchukin should be in a good position as an end-user in Japan given their relatively high credit rating for a domestic bank. Moody's Investors Service rates the bank at A1 while Standard & Poor's puts it at A plus.
"The more the merrier," said a credit derivatives head in Tokyo, adding, that if Norinchukin Bank becomes active it could boost liquidity.
