BOE Warns of Growing Risks From Hedge Fund Basis Trades

Core Viewpoint - The Bank of England is highlighting increasing risks associated with the basis trade strategy used by hedge funds, urging market participants to manage their risk to prevent potential market volatility in gilts [1] Group 1: Hedge Fund Activity - Hedge fund net gilt repo borrowing reached nearly £100 billion ($132 billion) in November, marking the highest level since data collection began [1] - This figure represents an increase from an estimated £77 billion in June, indicating a significant rise in borrowing activity [1]