Mizuho explores the potential damage caused by the Archegos collapse

Mizuho is examining whether Archegos Capital has suffered significant losses as a result of the collapse, and according to people familiar with the situation, there is a close client relationship with the Bank of Japan’s US-based family office.

Mizuho has followed an internal investigation Caution This week the Japanese donors from Namura and Mitsubishi UFJ Financial Group suffered short losses of b 2bn and 0 270m in contact with an unnamed client.

In both cases, people familiar with the situation confirmed that the client was Archegos, a fund managed by the former hedge fund manager. Bill Hawang, It was forced to default by a huge margin call last week.

Although Mizuho Prime does not provide a full range of brokerage services, people close to the situation say that the Japanese bank has given Archegos a fair amount of benefits and that its potential losses could be similar to those of MUFG.

A group of banks, hungry for Archego’s high commission, has provided the family office with more than $ 50bn in volatile equity through combined leverage. Swap agreement And other funding, people with direct knowledge of the situation said.

Archegos became the chief executive of the two brokers Investigation According to people familiar with these probes, whether Huang deliberately confused them with the leverage provided by the opponent’s banks. Arkigos was not immediately available for comment.

Mizuho said it has no plans to revise its earnings accounts but will do so if necessary.

Results from Archegos, whose missed margin call triggered last week Chaotic fire sales A chaos for Viacom CBS shares and a move to a higher-profit position on Friday has affected a circle of nine global banks with a variety of exposures.

As well as Goldman Sachs, Morgan Stanley and UBS, who commented that their losses should be minimal. Credit Suisse included, With potential losses estimated at about 4 4 billion, according to people close to the Swiss investment bank.

According to bankers directly involved, there were talks last Thursday between Archegos and six banks that provide brokerage services.

The Discussion focused on Whether or not Archegos’ unwinding could be managed in an orderly manner, but some banks failed to sell Archegos-linked shares at first.

According to people familiar with the situation, Mizuho, ​​Deutsche Bank and MUFG were not involved in the talks, as their exposure was considered lower than that of other banks.

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