Prime brokerage
BankingDefinition
Bundled services offered to hedge funds: securities lending, financing (margin), custody, clearing, and capital introduction. Generates lucrative fees for banks. Major prime brokers: Goldman, JPM, Morgan Stanley, BofA.
Concentration risk: Archegos blowup (2021) cost Credit Suisse $5.5B and Morgan Stanley $911M because they were over-concentrated in his swaps book. Drove tightening of single-client exposure limits across the industry.
Concentration risk: Archegos blowup (2021) cost Credit Suisse $5.5B and Morgan Stanley $911M because they were over-concentrated in his swaps book. Drove tightening of single-client exposure limits across the industry.