Bank of England warns on hedge fund gilt market risk

Photo: Benjamin Davies, Unsplash

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The Bank of England has issued a fresh warning about hedge fund dominance of trading in UK gilts and the risk of a rapid unwind sparking wider turbulence.

“Leveraged market participants, such as hedge funds, have an increasingly important role in gilt market activity – including cash, repo and related derivative markets,” the bank said in its twice-annual Financial Stability Report.

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