A hedgeHedgeA hedge is a position or financial arrangement designed to reduce the effect of an existing risk if the market moves unfavourably. How Does Hedging Work? A hedge creates an offs...Read More-fund industry group has warned that proposed Bank of England reforms to the UK gilt repo marketRepo MarketRepo Market refers to the repo market underpins much of the U.S. The term belongs in Level 7 because it helps connect macro conditions, policy, or another asset market to the wi...Read More could reduce liquidityLiquidityDefinition   Liquidity describes how easily buying and selling can occur without requiring a large change in price. A liquid market generally has active participation...Read More and increase volatilityVolatilityDefinition   Volatility describes the size and speed of price changes over time. A high-volatility market makes larger or faster moves, while a low-volatility market...Read More during periods of financial stress. The group urged the BoE to assess similar reforms in the U.S. before proceeding.

A hedge-fund industry group has warned that proposed Bank of England reforms to financing backed by UK government bonds could reduce liquidity during marketMarketDefinition A market is an environment where buyers and sellers come together to exchange assets, goods, services, or financial instruments. Prices form as buyers and selle...Read More stress, Reuters reported on 7 October. The warning came from the Alternative Investment Management Association in a letter seen by Reuters. The report concerns a newly disclosed industry objection to proposed rules, rather than reforms taking effect today. Its claims about potential market disruption remain attributed to the industry group.