Crack Down on Hedge Funds; financial stability for all is the greater goal

 Raise the cost of borrowing securities to curb leverage in repo markets.

Bank of England Governor Andrew Bailey to counteract the outsized hedge fund leverage he has repeatedly warned is a growing financial-stability risk.

https://www.bloomberg.com/news/articles/2025-02-11/multi-manager-hedge-funds-pose-stability-risk-says-boe-s-bailey


Bailey earlier this month in a speech at the University of Chicago Booth School of Business campus in London

https://www.bankofengland.co.uk/speech/2025/february/andrew-bailey-keynote-speech-university-of-chicago-booth-school-of-business

reiterated the undeniable fact that the footprint of hedge funds and non-bank market makers has grown substantially in recent years.

The real solution is to hit leveraged players in the pocket by requiring the banks that facilitate them to impose greater "haircuts" (a risk charge) on gilt repo financing.

https://www.ecb.europa.eu/ecb-and-you/explainers/tell-me-more/html/haircuts.en.html

Bank profits may suffer — but financial stability for all is the greater goal.

The BOE has a dual mandate not just for controlling inflation but also ensuring financial stability.

Oh for those halcyon days when the bank governor could lift an eyebrow and banks scrambled to avoid the opprobrium (severe criticism and blame).

Marcus Ashworth Bloomberg 25 februari 

https://www.bloomberg.com/opinion/articles/2025-02-25/it-s-time-for-the-boe-to-crack-down-on-hedge-fund-lending


RE: Riksbanken har svikit sitt ansvar - Stabiliteten i det finansiella systemet

https://englundmacro.blogspot.com/2025/01/riksbanken-har-svikit-sitt-ansvar.html


Tillbaka till Rolfs länktips 25 Februari 2025

https://englundmacro.blogspot.com/2025/02/rolfs-lanktips-25-februari-2025.html




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