LTCM had 'too much risk to be sustainable' says Myron Scholes

The levels of risk and leverage at hedge fund Long Term Capital Management (LTCM) created an unsustainable business and made its collapse in 1998 far more likely than markets recognised at the time, according to a top quantitative analyst who worked at the fund.

Myron Scholes, emeritus professor of finance at Stanford University and economics Nobel laureate, was a board member at LTCM, whose recruitment prior to the start of trading in 1994 helped lend it intellectual heft when raising capital