Bank shares tumble after hedge fund default

Credit Suisse was among banks to see stocks tumble on Monday (March 29).

That on reports that some major lenders face huge losses following a default by a U.S. hedge fund.

Shares in Credit Suisse were down around 13% in early trade.

Reuters sources named the origin of the turbulence as U.S. fund Archegos Capital.

It has reportedly defaulted on so-called 'margin calls' due to banks.

Credit Suisse said it could face a 'highly significant' hit to its first-quarter results.

Earlier Monday, Japan's Nomura said it faced a possible 2 billion dollar loss due to transactions with a U.S. client.

Its shares closed down over 16%.

Investors said the risks of a wider fallout seemed limited so far.

But there was nervousness about whether the full scale of the wipeout at Archegos had yet been revealed.

Shares in other big names including Deutsche Bank and UBS also saw sharp drops.

The first sign that some kind of storm was brewing came Friday (March 26) on U.S. markets.

That day saw a $20 billion fire sale of stocks reportedly linked to Archegos.

Shares in ViacomCBS and Discovery both fell around 27%.

For Credit Suisse this will mark the second straight quarter the bank has recorded losses over hedge fund exposure.

The firm is also grappling with fallout from the collapse of supply chain finance firm Greensill, with which it had close ties.