Big banks lose ground on Wall Street after US hedge fund defaults on loans linked to share trades

Big banks have weighed on Wall Street after warnings of potential losses from a hedge fund’s default on margin calls, although optimism about the US economy limited the falls.

Japan’s largest investment bank Nomura and Swiss banking giant Credit Suisse are facing billions of dollars in losses after US hedge fund Archegos Capital defaulted on margin calls, share market bets made with borrowed money, putting investors on edge about who else might have been caught out.