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[Zúrich / Nueva York, 30 de Reuters]- Financial institutions are evaluating the impact of the issuance of investment firm Arkegos Capital, which has lost money on leveraged transactions. Attention is also focused on tightening regulations by the authorities.
Despite Arkegos’ $ 10 billion in assets, it operates like a “family office” for former hedge fund executives and has received little direct oversight from regulators. Family offices are said to be created by wealthy families to manage and manage their assets.
Analysts at JP Morgan said yesterday that the maple tree issue could cost global banks $ 10 billion and “well beyond the normal industry restructuring scenario.” Credit Suisse, which has stated that it could have a significant impact on its first quarter results, is expected to be fully disclosed within the week.
Arkegos reiterated a statement on the 29th that “all plans are being discussed.”
Edward Moya, Senior Market Strategist at OANDA, said: “Although the impact of the Arkegos margin call appears to have subsided, the talks on regulatory oversight will not fade for the foreseeable future. pressure family offices and hedge funds to reduce their leverage, “he said.
Financial authorities in the US, UK, Japan and Switzerland have closely examined the situation.
Regulators in the US and UK are in talks with market players, including brokers, to determine the magnitude of the impact of defaults on Arquegos’ stock trading positions, according to people familiar with the matter. .
The United States Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) meet with industry players to understand the impact on financial institutions and clients and identify the credit risk of additional exposure.
The British Financial Conduct Authority (FCA) also appears to have had telephone conversations with market participants.
Arkegos brokers spoke on Wednesday about how to curb the impact of Arkegos’ position closing, according to people familiar with the matter. However, the deal was unsuccessful, and Goldman Sachs, with Arkegos’ consent, said it had executed a block operation to sell $ 3-4 billion worth of shares before the market opened on the 26th. .
“Regulators will carefully investigate the event, especially if there are any changes under the new administration,” said an analyst at JP Morgan.
Democratic Sen. Elizabeth Warren, who is critical of Wall Street, said in a Twitter post that the upcoming hedge fund issue “needs transparency and strong scrutiny to keep the economy out of the way.”
Credit Suisse and Nomura Holdings warned on the 29th that they could face significant losses and Arkegos is believed to be involved.
Mitsubishi UFJ Financial Group also announced on the 30th that a transaction between a European subsidiary and a US customer could cost around $ 300 million. It is not clear if the client is Archegos.
Wells Fargo, meanwhile, said it had provided brokerage services to Archegos, but incurred no losses by eliminating its exposure.
Other major banks say they do not anticipate significant losses related to Archegos. Goldman and Morgan Stanley quickly sold their shares on the 26th, avoiding significant losses, according to people familiar with the matter.
* Title and content have been updated.
