Forget The Losses: Here Are The Real Reasons Traders Are Spooked About The Archegos Implosion

Earlier, we presented JPMorgan’s thoughts on what the monetary hit from the Archegos fiasco would be to those banks who were also the fund’s prime brokers.

While significant – with the bank expecting as much as $10BN in total losses concentrated at Credit Suisse – these loses will not be game changing.

Yet last Friday’s fiasco is likely to have far-reaching consequences for the broader financial sector for two main reasons as explained earlier today by JPMorgan’s Andrew Tyler, author of the bank’s Market Intelligence report. We excerpt from his note below:

Yesterday’s session was dominated by the block trades from the HF liquidation.

This is sparking concerns about (i) reduced leverage and (ii) increased regulation.


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