Struggling to survive

Cover story

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In the immediate aftermath of Lehman Brothers' collapse, when Merrill Lynch was bought by Bank of America and the world speculated how Goldman Sachs and Morgan Stanley might be next to fall, business loyalties became suddenly hard to come by in the prime broking business - the desperate instinct to survive took over.

Hedge funds facing redemptions and investor demands to cut counterparty credit risk exposures to the two perennial prime brokerage firms - with tales of rehypothecation risk still r