The Bank of England (BoE) has warned that hedge funds are facing substantial margin calls from prime brokers due to extreme market volatility triggered by U.S. President Donald Trump’s tariff announcements, and cautioned that the risk of further sharp market corrections remains high.
The BoE’s Financial Policy Committee, after reviewing the situation, found that the hedge funds have been able to meet these margin calls for now.
However, it cautioned that the overall global risk environment has worsened, based on observations made during committee meetings held on April 4 and April 8.
According to the committee, the level of uncertainty has increased significantly. It noted that both the chance of adverse events occurring and the potential severity of their impact have escalated.
