Some Hedge Funds Too Big to Fail for Bond Market, IMF Says (2)

A small group of funds has accumulated such large short wagers in the Treasury market that they could destabilize the broader financial system during times of stress, according to the International Monetary Fund.

“A concentration of vulnerability has built up, as a handful of highly leveraged funds account for most of the short positions in Treasury futures,” the IMF said in its Global Financial Stability Report released this week. “Some of these funds may have become systemically important to the Treasury and repo markets, and stresses they face could affect the broader financial system.”

The IMF’s comments came in ...