Monday, March 29, 2021

Major World Banks Warn of Billions in Losses Today After They Exit Positions with Large US Hedge Fund


Credit Suisse and Nomura warned Monday of “significant” hits to first-quarter results, after they began exiting positions with a large U.S. hedge fund that defaulted on margin calls last week. 
While neither Credit Suisse nor Nomura named the fund, it’s been widely reported that Archegos Capital Management is the firm connected to the fire sale. 
In a trading update before the market open, Credit Suisse said a number of other banks were also affected and had begun exiting their positions with the unnamed firm. 
The Zurich-based lender’s shares were down over 13% by lunchtime following the announcement. 
The Japanese firm Nomura is facing a mess today: Nomura also issued a trading update on Monday warning of a “significant loss” at one of its U.S. subsidiaries resulting from transactions with a client stateside. 
Japan’s largest investment bank said it was evaluating the potential extent of the loss, estimated at $2 billion. Its shares fell more than 16% on Monday. 
“This estimate is subject to change depending on unwinding of the transactions and fluctuations in market prices,” the bank said.

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