Japanese regulators will heighten scrutiny on high-risk trades by domestic financial institutions in the wake of the Archegos fallout, the Nikkei business daily reported on Wednesday.

Top investment bank and brokerage, Nomura Holdings, was one of the highest-profile casualties while Mitsubishi UFJ Financial Group (MUFG) warned of a loss of around $270 million.

The Financial Services Agency (FSA) and the Bank of Japan (BOJ) will scrutinise how financial institutions that incurred losses had been managing transaction risks, the Nikkei said.

The regulators will also conduct blanket checks on financial institutions to see whether any other entities had suffered losses, the Nikkei reported, without citing sources.

The move underscores the FSA’s concern over the fact Japan’s major financial institutions faced a risk of losing several hundred billion yen, the Nikkei said.

The BOJ declined to comment. FSA officials were not immediately available to comment.

The FSA and the BOJ have recently been enhancing cooperation in overseeing Japan’s banking sector to avoid overlaps in inspections and address new risks that emerge as markets become globalised.

Sources familiar with the matter told Reuters that Japanese authorities have been scrutinising incidents involving domestic financial institutions on a regular basis.

But regulators are still scrambling to gather information as the fallout from Archegos caught many of them off guard, they said on condition of anonymity as they were not authorised to speak publicly.

“It was something completely off the radar until just recently,” said one of the sources, who said it was difficult for authorities to keep track of incidents like Archegos.

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