As the European financial crisis worsened in November, the executive in charge of capital markets at Nomura proposed a plan to buy up billions of dollars of Italian government bonds with the firm's money, people familiar with the matter said.

The bet was part of a broader plan by the executive and his boss, both former Lehman Brothers executives to transform Japan's dominant brokerage into a profitable investment bank focused on fixed income, much like their old firm, which was best known for trading bonds.