Little Lamb, who made thee? The Archegos Affair, part 2.

On formal and informal systems

Mr Hwang and friend, yesterday.

Recap

Last time we looked at how the regulatory margin regime, enacted to limit systemic risk after the global financial crisis of 2008, made the Archegos situation worse.

An aggressive family office cornered some illiquid stocks with money borrowed from prime brokers who, being competitors, could not see each other’s posit…