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Regulator Urges Action Against Hedge Funds' Risky Trading

11/28/2025

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Summary

Story summary

Pablo Hernández de Cos, head of the Bank for International Settlements, urged regulators to curb hedge funds' leveraged trading in government bond markets amid rising public debt.
He warned that non-bank financial institutions held assets equal to 225% of global GDP by end-2023, surpassing banks and heightening systemic risk through leveraged strategies like basis trading.
De Cos called for a mix of fiscal, monetary, and prudential policies.

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Story summary

Pablo Hernández de Cos, head of the Bank for International Settlements, urged regulators to curb hedge funds' leveraged trading in government bond markets amid rising public debt.
He warned that non-bank financial institutions held assets equal to 225% of global GDP by end-2023, surpassing banks and heightening systemic risk through leveraged strategies like basis trading.
De Cos called for a mix of fiscal, monetary, and prudential policies.