US regulator calls for greater scrutiny
of hedge funds after bond turmoil- FT
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[April 15, 2023]
(Reuters) -Gary Gensler,
the chair of the U.S. Securities and Exchange Commission (SEC), said
hedge funds and other parts of the shadow banking system need to face
greater scrutiny after last month's upheaval in U.S. government bonds,
the Financial Times reported on Saturday. |
![](../images/041523PIX/busine56.jpg)
U.S. Securities and Exchange Commission
(SEC) Chairman Gary Gensler testifies before the Senate Banking, Housing
and Urban Affairs Committee during an oversight hearing on Capitol Hill
in Washington, U.S., September 15, 2022. REUTERS/Evelyn Hockstein |
Gensler told the newspaper that reducing the risks from
speculative funds and non-banking financial institutions was
"more important than ever".
"We just had Treasury yields move more significantly than they
had in 35 years in three days in mid-March," the Financial Times
quoted Gensler as saying, referring to the volatility in
Treasury bonds last month following the rapid collapse of
Silicon Valley Bank and the fall of Signature Bank.
"When you have that, it's appropriate as a capital markets
regulator to talk to folks and see whether that risk . . .
propagates out."
Last month, the SEC proposed new rules for better oversight of
private equity and hedge funds that would require reporting of
events indicating "significant stress" to the SEC within one
business day.
Gensler said he had previously identified hedge funds were a
risk to financial stability and that the SEC was in direct
contact with market participants and received quarterly reports
from hedge funds, the report added.
(Reporting by Gokul Pisharody in Bengaluru; Editing by Alex
Richardson and Mark Potter)
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