According to the International Monetary Fund, a small group of funds have accumulated short selling in the Treasury market so large that they could destabilize the financial system as a whole during times of stress.
“A concentration of vulnerabilities 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 financial and repo markets, and stresses they face could have implications for the entire financial system.”
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