Archegos Fiasco Spurs Regulators to Demand Banks’ Answers Soon

Britain’s top banking regulator is pressing ahead with an international push for answers on how banks’ exposure to Archegos Capital Management got so massive, leading to more than $10 billion in losses.

The Prudential Regulation Authority has started a probe, asking firms including Credit Suisse Group AG, UBS Group AG and Nomura Holdings Inc. to hand over information related to their lending to Archegos by next month, according to people familiar with the matter.

Authorities around the world have said they would scrutinize Archegos’s meltdown and are now making progress on those pledges. The Prudential Regulation Authority is taking the lead on positions that were held by the U.K. entities of foreign banks and coordinating with U.S., Swiss and Japanese watchdogs, said the people, who asked not to be named discussing information that is not public. Most of the leverage Credit Suisse extended to Archegos was booked in London, they added.

Before its collapse in March, Bill Hwang’s once-obscure family office built giant stakes in companies without the market knowing because the assets were held on the books of its brokers. The PRA aims to build a fuller picture of its bets by cross-checking data from the banks, the people said. The watchdog aims to conclude its probe by the end of the summer, the people said.