BoE and Fed examine bank exposure after Jane Street loss
Jane Street lost roughly US$15 billion in July, particularly through its investment in the Situational Awareness hedge fund and other technology holdings.
Following a near-collapse of the proprietary trading firm Jane Street in July, the US Securities and Exchange Commission subpoenaed several Wall Street banks to investigate the firms' trading activity and leverage usage. The turmoil at Jane Street, which lost approximately US$15 billion, was largely attributed to its investments in AI and technology stocks.
The central banks of the United States and the United Kingdom have now asked global banks about their exposures to large trading firms, including Situational Awareness, a hedge fund managed by former OpenAI researcher Leopold Aschenbrenner. The central banks are seeking information on the risk appetite of the trading firms, how banks' exposures to them evolved throughout the trading day, and the effectiveness of their risk controls. The Bank of England and the US Federal Reserve have declined to comment on the matter.
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- BoE and Fed examine bank exposure after Jane Street loss freemalaysiatoday.com
