Hedge funds: good or bad for market functioning?
23 September 2024By Federico Maria Ferrara, Tobias Linzert, Benoit Nguyen, Imène Rahmouni-Rousseau, Marta Skrzypińska and Lia Vaz Cruz[1]Hedge funds have substantially increased their trading activity in euro area government bond and repo markets. The ECB Blog evaluates how this plays out for market functioning and intermediation. Government bonds are central to the broader landscape of financial markets. As high-quality liquid assets, they are an essential component in investor portfolios, and…

