Credit
Big banks have weighed on Wall Street after warnings of potential losses from a hedge fund's default on margin calls, although optimism about the US economy limited the falls.
Key points:
- US hedge fund Archegos Capital defaulted on its share trading loans
- It caused Credit Suisse shares to plunge 14 per cent and Nomura to fall 16.3 per cent
- Dow Jones up 0.3 per cent to 33,171, S&P 500 down 0.1 per cent to 3,971, Nasdaq 0.6 per cent to 13,060
Japan's largest investment bank Nomura and Swiss banking giant Credit Suisse are facing billions of dollars in losses after US hedge fund Archegos Capital defaulted on margin calls, share market bets made with borrowed money, putting investors on edge about who else might have been caught out.
Archegos is run by former Tiger Asia boss, Bill Hwang. Tiger Asia was a Hong Kong-based fund trading in Asian shares.
In 2012, Mr Hwang and his firm paid $US44 million ($57 million) to settle US insider trading charges.
Nomura shares fell 16.3 per cent, a record one day drop.
Here
Being reported across the Business Media
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Will Archegos Capital Management collapse see other firms shot down in flames? | Business | The Times
Archegos margin call share dump ripples across markets | Reuters