Hedge Fund Basis Trade Faces Scrutiny as Regulators Mull Probe
- Shadow lenders now hold about half of all financial assets
- Watchdogs have spent years trying to assess non-bank risks
The push for data on so-called non-bank financial institutions comes as regulators across the world weigh policies to tame risks in a fast-growing industry.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
Hedge funds’ record bet on US Treasuries is facing fresh scrutiny as the world’s most powerful financial watchdog mulls a deep dive into the money-spinning trade.
After running into difficulties with a mammoth project launched last year to gather data on the sprawling shadow banking system, the Financial Stability Board is now discussing a pivot to focus on a handful of priority areas, including the so-called basis trades, three people with knowledge of the matter said.