Global Watchdog Flags Risks in $16 Trillion Government-Backed Repo Market

Global watchdog flags risks in $16 trillion government-backed repo market

Vulnerabilities are building across the $16 trillion market for government bond-backed repurchase agreements, a global financial watchdog warned on Wednesday, highlighting rising leverage among hedge funds and growing dependence on short-term funding.

Watchdog warns on 'fire sale dynamics' risk in repo market

The global financial watchdog has urged regulators to cast a closer eye over the ways in which leveraged trades in the short-term repo market could amplify financial stability risks worldwide.  Regulators at the Financial Stability Board (FSB) are particularly concerned that leveraged investors might be forced to dump their assets in the event of a stress, putting intense downward pressure on bond markets.  “Asset managers such as hedge funds wh…

Global watchdog flags risks in US$16 trillion government-backed repo market

The FSB has identified several vulnerabilities that could pose risks to the broader financial system

FSB warns of financial stability challenges in repo markets

FSB Work Programme 2026

On 3 February 2026, the Financial Stability Board (FSB) published its Work Programme for 2026.The Work Programme summarises ongoing and planned FSB initiatives in 2026, some of which extend into 2027 and beyond. An Annex to the Work Programme provides an indicative timeline of key FSB publications and external events planned for 2026. In February, the FSB will issue a report on vulnerabilities in government bond-backed repo markets and in March …