In Archegos fire sale, Credit Suisse, Nomura burned by slow exit
Matt Scuffham, Elizabeth Dilts Marshall, Brenna Hughes Neghaiwi, 31 March 2021
NEW YORK/ZURICH (Reuters) -While banks including Goldman Sachs, Morgan Stanley and Deutsche Bank were able to exit their trades with Archegos Capital relatively unscathed, Credit Suisse and Nomura have been burned in the fire sale.
The blowup of the Archegos fund, a family office run by former Tiger Asia manager Bill Hwang, is still reverberating across the financial system, with global banks so far standing to lose more than $6 billion.
Switzerland’s Credit Suisse and Japan’s Nomura are expected to bear the brunt of that.
They had hoped that rival banks that had also financed and processed trades for Archegos would hold off from exiting their positions, but were left exposed when Goldman Sachs and Morgan Stanley began unwinding their trades with the fund, according to three people with direct knowledge of the matter.
So far, it appears the banks that got out of the trades the quickest have suffered the least and Goldman Sachs may even have profited, said three sources familiar with the trades.