Today, the Bank of Italy published a new Note on Financial Stability and Supervision on the "Lessons learned from the collapse of Archegos: policy and financial stability implications", prepared by Nicola Branzoli, Arianna Miglietta, Federico Calogero Nucera, Onofrio Panzarino and Carmine Porello.
In this note, the authors examine the events that led to the failure of Archegos Capital Management in March 2021 and discuss potential implications in terms of financial stability and policy. The note also describes the main brokerage services provided to sophisticated investors (e.g. hedge funds, institutional investors and family offices) by investment banks and broker-dealers. The main policy implications from the analysis refer to the following topics: 1) risk-management practices of PBs, relating in particular to collateral and margining practices; ii) the measurement and monitoring of the use of derivatives in the Non-Bank Financial Intermediation (NBFI) sector; iii) the regulation of family offices.
