Global Regulators Warn of ‘Hidden Leverage’ in Financial System


Global financial regulators are warning against “hidden leverage” in the financial system, cautioning that a build-up of borrowed money among non-bank institutions could leave markets vulnerable to widespread stress and financial disruption.

The Financial Stability Board, a global body that coordinates on financial regulation, said in a Wednesday report that hedge funds in particular are operating with high levels of synthetic leverage, which is when derivatives are used to create exposure to certain assets.

Data gaps make it difficult to quantify how much of this leverage exists, said the report from the FSB, which is chaired by Dutch central bank president Klaas Knot.

Share post:



More like this

Fifa warned players could go on strike

Football's world governing body Fifa has been warned players...

Family-friendly hotels for summer vacation in Europe: Travel Weekly

Felicity LongAs the weather warms and the school year...

Shania Twain Speaks Out On Her Ex-Husband’s Affair: ‘So Sad For Him’

Shania Twain can forgive ― but that doesn’t necessarily...