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BoE's Kashyap wants 'forensic investigation' of Archegos collapse

LONDON, May 26 (Reuters) - Financial regulators should undertake a detailed cross-border probe into how the collapse of U.S. investment fund Archegos cost mostly foreign banks more than $10 billion, Bank of England policymaker Anil Kashyap said on Wednesday.

Kashyap, a finance professor at Chicago Booth business school and an external member of the BoE’s Financial Policy Committee, also warned that new European Union bank capital rules could have “tragic” outcomes if abused.

Archegos defaulted on margin calls in March, leaving banks nursing heavy losses after a fire sale of the shares that had been meant to act as collateral. (Reporting by David Milliken Editing by Gareth Jones)

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