Fed, BoE Probe Banks’ Trading-Firm Exposure After Jane Street’s $15 Billion Loss
Updated
Updated · The Business Times · Sep 21
Fed, BoE Probe Banks’ Trading-Firm Exposure After Jane Street’s $15 Billion Loss
3 articles · Updated · The Business Times · Sep 21
Summary
$15 billion in July losses at Jane Street have led the Federal Reserve and Bank of England to ask global banks for details on their exposure to major trading firms, the Financial Times reported.
The inquiries focus on firms’ risk appetite, how banks’ exposure changed through the trading day, and whether risk controls held up during the turmoil.
Situational Awareness — an AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner — was forced in July to sell most of its public equities portfolio to Citadel Securities after a sharp AI and chip-stock sell-off.
That unwind contributed to Jane Street’s hit and widened regulatory concern after the SEC in August subpoenaed Goldman Sachs, JPMorgan, Citigroup and Bank of America over the fund’s trading, leverage and margin-call episode.