Key facts
- US and UK central banks are probing global banks' exposures to large trading firms.
- The inquiries follow significant losses at a hedge fund.
- AI and chip stocks experienced a sharp selloff in July.
The Federal Reserve and the Bank of England are investigating global banks' exposures to large trading firms, according to a report by the Financial Times. These inquiries come in the wake of significant losses incurred by a hedge fund, which reportedly led to a sharp selloff in AI and chip stocks during July. The AI-focused Situational Awareness fund, for instance, divested most of its public equities portfolio to Citadel following this market downturn.