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Post-Archegos Hedge Fund Financing Faces Close Scrutiny by BOE

  • Bank of England’s Hall looking at margins on leveraged bets
  • Regulators globally weighing changes after Archegos collapse
Bank Of England Interest Rate Decision Day
Photographer: Hollie Adams/Bloomberg

The Bank of England is considering closer scrutiny of the work banks carry out for hedge funds after the meltdown of Archegos Capital Management exposed gaps in oversight.

Banks’ prime brokerage desks, which trade on behalf of large clients such as hedge funds, need to be able to cover losses in good times and bad and should be a “low-risk business,” said Jon Hall, external member of the BOE’s Financial Policy Committee.