> Global banks bracing for losses amid US hedge fund collapse
> World banks may lose over $6 billion from the downfall of the US investment firm Archegos Capital, sources told Reuters. Regulators are closely monitoring the situation as panic spreads about the possible scale of the fallout.
> The sudden liquidation of the New York-based billionaire Bill Hwang’s Archegos Capital Management ignited a fire sale of more than $20 billion in assets that has left some of the world’s biggest investment banks bearing billions of dollars of losses.
> According to billionaire investor Mike Novogratz, the collapse of Hwang’s Archegos fund could turn out to be “the most spectacular personal loss of wealth in history.”
> The problems started last week when a disappointing stock sale by media giant ViacomCBS triggered devastating bank margin calls for Archegos, three people familiar with the matter said. Shares in ViacomCBS plummeted 23% last Wednesday after the media company sold shares at a price that diluted its value. The shares continued to decline, setting off alarm bells at Archegos’ prime brokers and prompting them to offload stock in all of Archegos’ investments.
> According to the sources, Goldman Sachs and Morgan Stanley were quick to offload shares on Friday, forestalling a material financial impact.
> Meanwhile, investment banks Nomura and Credit Suisse warned investors that they were facing huge losses from their exposure to Archegos. Shares in Japan’s Nomura plunged 16% and Credit Suisse dropped 14% amid analyst speculations on how much money they could lose.