Banks suffer major losses after $30 billion fire sale at hedge fund Archegos

Major banks such as Credit Suisse and Nomura said Monday that a fire sale of assets at a U.S. hedge fund would affect their earnings this quarter.

The sell-off at Archegos Capital Management stemmed from a margin default, meaning it was unable to maintain minimum asset values for accounts that invest with borrowed money.

Archegos was reportedly forced to sell off assets reportedly in the range of $30 billion, flooding the market with stocks and bringing down prices.

Banking stocks took a hit in early Monday trading.

“While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results, notwithstanding the positive trends announced in our trading statement earlier this month,” Credit Suisse said.

Japan’s Nomura Holdings warned of “significant loss” estimated though other banks, such as Goldman Sachs, said their losses from the event would be immaterial.

A company spokesperson could not be reached for comment.

Archegos was founded by former Tiger Management equity analyst Bill Hwang.