The financial crisis has cast light on some very complex structures that are difficult to understand – and few more so than the board of directors of Citigroup.
New Star’s senior management suffered hundreds of thousands of pounds in paper losses after the company’s share price halved in early trading today, following the regulator’s refusal to suspend shares in light of discussions between New Star and its lenders. But today’s losses are only a fraction of the directors’ total paper losses since the peak of New Star’s success early last year.
Investors have long been urged to spread their equity risk globally to insure against being trapped in one market – usually their home market – in the event of a downturn.