April 15 (Reuters) – Gary Gensler, the chair of the U.S. Securities and Change Fee (SEC), mentioned hedge funds and different elements of the shadow banking system must face larger scrutiny after final month’s upheaval in U.S. authorities bonds, the Monetary Occasions reported on Saturday.
Gensler instructed the newspaper that lowering the dangers from speculative funds and non-banking monetary establishments was “extra essential than ever”.
“We simply had Treasury yields transfer extra considerably than they’d in 35 years in three days in mid-March,” the Monetary Occasions quoted Gensler as saying, referring to the volatility in Treasury bonds final month following the fast collapse of Silicon Valley Financial institution and the autumn of Signature Financial institution.
“When you might have that, it is acceptable as a capital markets regulator to speak to of us and see whether or not that threat . . . propagates out.”
Final month, the SEC proposed new guidelines for higher oversight of personal fairness and hedge funds that will require reporting of occasions indicating “vital stress” to the SEC inside one enterprise day.
Gensler mentioned he had beforehand recognized hedge funds had been a threat to monetary stability and that the SEC was in direct contact with market contributors and acquired quarterly studies from hedge funds, the report added.
Reporting by Gokul Pisharody in Bengaluru; Modifying by Alex Richardson
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