Financial Fragility in ‘Mature’ Markets C. P. Chandrasekhar

With rising non-financial corporate debt and evidence of elevated borrowing levels among non-bank financial companies, the fragility resulting from excess leverage has returned to haunt developed country financial markets. The fact that the collapse of a little-known family office firm like Archegos Capital Management inflicted huge losses on leading banks suggests that the failure of a rogue, overleveraged speculator can have systemic effects of the kind that unravelled in 2008.

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(This article was originally published in the Economic and Political Weekly on May 15, 2021.)