Credit Suisse tightens hedge fund limits amid Archegos fallout
ZURICH (BLOOMBERG) - Credit Suisse Group is tightening the financing terms it gives hedge funds and family offices, in a potential harbinger of new industry practices after the Archegos Capital Management blow-up cost the Swiss bank US$4.7 billion (S$6.3 billion). Credit Suisse has been calling clients to change margin requirements in swap agreements so they match the more restrictive terms of its prime-brokerage agreements, people with direct knowledge of the matter said. Specifically, Credit Suisse is shifting from static margining to dynamic margining, which may force clients to post more collateral and could reduce the profitability of some trades. A spokeswoman for Credit Suisse had no comment. Swaps are the derivatives trader Bill Hwang used to take highly leveraged positions in stocks at Archegos, his New York-based family office. When his positions suddenly lost value the week of March 22, Archegos blew through its margin and equity, and Mr Hwang lost US$20 billion in just a few days. Static margining sets a fixed amount of collateral that a client has to post to maintain a certain size of position or account. With dynamic margining, a dealer can require more collateral if ...
Real household incomes decline for first time in more than 10 years
SINGAPORE - The Covid-19 pandemic hit Singapore households hard last year, with overall median household income from work falling by 2.5 per cent in nominal terms from $9,425 to $9,189. After taking into account inflation, this works out to a 2.4 per cent drop in real terms - the first such decline in more than 10 years since after the economy was battered by the global financial crisis. In 2009, median monthly household income from work fell by 1.9 per cent in nominal terms, or 2.5 per cent in real terms after factoring in inflation. In a new report released on Monday afternoon (Feb 8), the Department of Statistics (DOS) found that lower-income households were the hardest hit, with those in the bottom 10 per cent seeing a 6.1 per cent real decline in income. In contrast, the rest of the households recorded real declines of 1.4 per cent to 3.2 per cent. But government transfers and taxes also significantly reduced the Gini coefficient from 0.452 to 0.375. The Gini coefficient measures income inequality from 0 to 1, with 0 being most equal. "This can be attributed to the significant amount of government support provided during the Covid-19 crisis in 2020, especially for households s...