Extreme liquidity, combined with high levels of market volatility and high-tech valuations, can make a lethal cocktail. The collapse of Archegos Capital is proof of that. It was this combination of extreme liquidity, high volatility and high valuations that ultimately led to the margin call collapse and the downfall of the firm

Part of the blame can undoubtedly be put at the door of delays in implementing the Dodd-Frank Act in the US. Those rules — designed to shore up big banks and manage excessive risk-taking in the derivatives market — had been repeatedly put off. If they had been implemented more rapidly, they could well have helped to manage this crisis.