Bank of England advances proposals to cap hedge fund leveraging in UK gilt markets

The Bank of England (BoE) is moving forward with plans to cap the debt hedge funds can leverage during UK government bond trading. These proposals aim to curb risks associated with concentrated positions and potential destabilizing cross-market unwinds, particularly in light of recent market shifts and turbulence. Reforms under consideration for the gilt repo market include enhanced central clearing and minimum haircuts on non-centrally cleared transactions.