Archegos Capital fallout may wipe $6bn from global banks: Report

Losses at Archegos Capital led to a fire sale of stocks on Friday after it failed to meet banks’ call for more collateral.

Global banks may lose more than $6bn from the downfall of United States-based Archegos Capital, the Reuters news agency reported citing sources familiar with trades involving the US investment firm, as regulators and investors feared the episode would reverberate more widely. Japan’s Nomura and Credit Suisse of Switzerland warned of big losses from lending to Archegos for equity derivatives trades, triggering a worldwide sell-off in banking stocks. Morgan Stanley shares fell 2.6 percent and Goldman Sachs Group dropped 1.7 percent. Nomura shares closed down 16.3 percent, a record one-day drop, while Credit Suisse shares tumbled 14 percent, their biggest fall in a year. Deutsche Bank dropped 5 percent and UBS was off 3.8 percent.