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A pedestrian walks along Broadway near the New York Stock Exchange (NYSE) in New York, USA, on Wednesday, June 17, 2020. US stocks fluctuated as the recent rally begins to show signs of losing momentum amid a worrying spike in coronavirus cases.
Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
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In the middle of last week, an alarm sounded in the heart of Wall Street. Management has realized that it could face the largest hedge fund-related outbreak since Long-Term Capital Management (LTCM) in the 1990s.
Investment banks from around the world came together in a hastily organized conference call. A quick ceasefire was needed to address the issue of Bill Juan’s family office, Arquegos Capital Management, to avoid billions of dollars in bank losses and potential market chain reactions. However, by the 26th, each bank had begun to move for its own good.
The forced liquidation of Arquegos’ positions caused a drop in the share prices of major stocks last week and continues to shock the capital markets in general. Before this, there was controversy at the top of the international financial world, which quickly turned to guilt and anger, according to people familiar with the matter. Each bank has started to count the damages.
Far away,With Credit Suisse GroupNomura Holdings has informed shareholders that it may incur a “large” loss. Rewinding the position was one step ahead of the same industry.The Goldman Sachs Group has informed investors that the impact on earnings is likely to be minor.Deutsche Bank says it has avoided losses. It is said that he was doing block trading until the night of the 28th.Morgan Stanley has yet to clear up the loss.
Before the topic was released on the morning of the 26th, officials from the world’s leading sibling universities held a conference call with Juan to avoid confusion. The idea, launched by Credit Suisse, was aimed at putting him on a kind of temporary ceasefire to find a way to organize positions without causing panic.
However, no agreement was envisaged and, on the night of the 25th, some banks had sent a notice of default to Arquegos to limit potential losses and took steps to seize the guarantees. However, even then, one person said it was unclear when the sale could proceed under the terms of the contract with Arquegos.
Soon after, the search for responsibility for who was on the run began. Some suspect that Credit Suisse is not fully committed to freezing the sale. On the morning of the 26th, it was widely discussed that Goldman had apparently planned to sell some positions to back Arquegos, and rival banks were uncomfortable hearing this. Additionally, Morgan Stanley has started to attract public attention with block trading.
The person in charge on each line declined to comment.
Original title:Credit Suisse’s bid for an orderly Archegos settlement ends bank fights （抜 粋
