Over the past week, we keep uncovering the repercussions of mismanaged leverage — most notably the liquidation of 3 Arrows Capital (3AC). We could spend time arguing about market action and the impact of “whales” manipulating market prices to force it. The fact remains, if risk management were properly done, the risk of forced liquidations would have been much reduced. I do not profess to know the inner workings of the risk management departments of the affected companies, but from what I can...
