The dust is still settling among the world’s biggest investment banks after the implosion of the secretive hedge fund, Archegos Capital Management. Its collapse led to a $20bn asset ‘fire sale’ late last month and left the fund’s main margin lenders, Credit Suisse and Nomura, smarting with estimated losses of up to $7bn.
Credit Suisse has already taken a $4.7bn write down, dividends have been cut and buybacks suspended, heavy fines are on the horizon and the shares have fallen some 20% since the news broke. The Swiss lender is now parting company with much of its senior leadership.
The co-heads of its prime brokerage business have stepped down, as have the chief risk officer and the respective heads of investment banking, equities sales and trading, credit risk, counterparty credit risk and counterparty hedge fund risk.
This week it also came to light that, contrary to reports at the time, Morgan Stanley also suffered a $0.9bn loss as a result of Archegos Capital going bust.
