Archegos and Greensill: collapse, reactions and common features

Abstract

The recent collapse of certain market operators has reopened the debate on the vulnerabilities of non-bank financial intermediation and their implications from the regulatory and supervisory standpoint. This article focuses on Archegos and Greensill whose collapse, although not systemic, highlights the importance of the interconnections between this type of institutions and the banking sector. It describes the circumstances that led to their collapse, the regulations applicable to them and the main reactions of the competent authorities to date. It then discusses some of the common features that can be identified as determinants and that could inform future debate on these cases from a regulatory and supervisory policy perspective.