Archegos Debacle Reveals Hidden Risk of Banks’ Lucrative Swaps Business
By Robert Armstrong
April 1, 2021, Financial Times
The Archegos Capital debacle has exposed the hidden risks of the lucrative but opaque equity derivatives business through which banks empower hedge funds to make outsize bets on stocks and related assets.
The soured wagers made by Bill Hwang’s family office have triggered significant losses at Credit Suisse and Nomura, underscoring how these tools can cause a chain reaction that cascades across financial markets.
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