Rehypothetical argument: custodians cash in on prime broker risk worries

The collapse of Lehman Brothers, whose prime broking clients found their assets had been ‘rehypothecated’ into oblivion, has not only encouraged prime brokers  to introduce rehypothecation ‘caps’, it has allowed custodians to capitalise on long/short funds’ fear for the safety of  assets held with their prime broker, next week’s Investment Administration Conference in Sydney will hear.

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