Editorial Board
Maybe the Next Archegos Won’t Be Such a Big Surprise
The SEC’s plan to require disclosure of large derivatives positions could help head off similar disasters.
Who knew?
Photographer: Emile Wamsteker/BloombergBack in March, an investment fund called Archegos Capital Management collapsed after building up vast derivatives bets on several stocks, precipitating billions of dollars in losses for its lenders. The incident raised a troubling question about the country’s financial early-warning system: How could regulators have remained unaware of such a large concentration of risk until it was too late?
Now the Securities and Exchange Commission has a plan to ensure that such dangers won’t go unnoticed. It should proceed as quickly as possible.