More revelations are surfacing from the collapse of Bill Hwang’s Archegos Capital, including potential losses exceeding $6 billion for global banks.
In addition to Nomura’s warning of a possible $2 billion loss, widely believed to be linked to Archegos, a «Financial Time» report citing unnamed sources estimates that Credit Suisse could face losses of at least $1 billion and as high as $4 billion.
The collapse has also caught the attention of regulators in the U.S., U.K., Switzerland and Japan, which said they were closely monitoring developments.
Immaterial Losses Elsewhere
Not all banks involved in providing prime brokerage services to Archegos were significantly impacted.
Goldman Sachs and Morgan Stanley, that latter of which sold $4 billion worth of Archegos-linked stocks, were reportedly hit by immaterial losses.
Deutsche Bank said in a statement that it did not incur losses from related exposure and did not expect to incur any either from unwinding remaining positions.
Highly Leveraged Bets
Global banks are reeling in from losses linked to highly leveraged trades from Archegos which invested in equity swaps backed by collateral.
Hwang’s family office reportedly has around $10 billion of assets but held positions worth more than $50 billion.
«This is a challenging time for the family office of Archegos Capital Management, our partners and employees,» said a company spokesperson. «All plans are being discussed as Mr. Hwang and the team determines the best path forward.»
