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Credit Suisse’s $4.7b casualtyINTL

Credit Suisse’s $4.7b casualty

If you flinched at past news that Nomura Holdings (NMR) lost $2b over the whole Archegos drama, then you might want to look away now!

Credit Suisse announced the implosion of investment firm Archegos Capital Management cost them a painful $4.7b. And so, the bank was forced to take further extreme measures, such as slashing dividends, getting rid of bonus payments for its top execs, and binning a recent share buyback program — ouch!

For those who are still catching up: long story short, Wall Street witnessed a major $30b stock sell-off last month after Archegos defaulted on highly leveraged margin calls (also known as borrowing a lot of money it couldn’t pay back).

why it matters
This is Credit Suisse’s second major drama this year alone! Last month, the bank froze $10b connected to the now-disgraced supply chain finance startup Greensill Capital, which filed for insolvency over its allegedly dubious lending practices. These incidents have weighed on the bank’s stock — it's dropped over 10% this year.