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Archegos Fiasco Is Latest Reminder Super-Rich Love Leverage

  • More than 10% of the world’s wealthiest have pledged shares
  • Banks risk losses when clients default on their margin loans
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Bloomberg’s Erik Schatzker reports on the turmoil caused by Bill Hwang.Source: Bloomberg)
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Bill Hwang used leverage from across global banks to build his family office into a whale with positions that may have topped $50 billion.

Then came the collapse, with more than $20 billion in holdings linked to his Archegos Capital Management liquidated in just days. That’s prompted warnings of losses at banks including Nomura Holdings Inc. and Credit Suisse Group AG, as well as speculation over whether other investors with high leverage could cause more market chaos.