Risk USA: Crowded trade increases turmoil again, say CROs

“People don’t realise that one of the main factors that contributed to this period’s recent stress was the crowded trade, and the lack of liquidity for a particular trade once everyone gets out of the same trade,” said Madelyn Antoncic, chief risk officer at Lehman Brothers in New York.

She added that crowded trades have been experienced in the past, but there was too much complacency going into the crisis. In the second quarter of 2006, Lehman Brothers noticed the deterioration in the