Bank of England Is Ramping Up the Pressure on Hedge Funds

Dave Ramsden, the Bank of England’s deputy governor for markets, has finally said the quiet bit out loud. In a speech last week addressing massive hedge fund leverage in the UK gilt repurchase agreement market — where government debt is borrowed and loaned to ease liquidity — he threw down the gauntlet: "Something needs to be done." Cue ominous music.

The central bank’s July 2025 Financial Stability Report highlighted that just five hedge funds are responsible for 90% of net gilt repo borrowing, with more than £100 billion ($134 billion) of exposure as of the end of November. That concentration of risk — it didn’t name the funds — is clearly unhealthy. I’ve been writing about the dominance of major hedge funds along with the ineffective hand-wringing response from regulators for some time. It's worrying that "something" still isn't an actionable plan to get a grip of the situation; Ramsden made clear that while discussions are underway between the BOE and the market players, there’s no timeline. Action is unlikely until the findings of its September discussion paper are released. Still, the war of words is heating up.