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Fed steps up scrutiny after Jane Street loss

By Sohail Khan 21 September 2026, 10:47 am

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Business News›News›International›Business›US Fed, BoE step up scrutiny of bank exposure to trading firms after Jane Street loss: Report

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US Fed, BoE step up scrutiny of bank exposure to trading firms after Jane Street loss: Report
Synopsis

Global banks face inquiries from central banks regarding trading firm exposures. The Bank of England and Federal Reserve seek details on risk appetite and controls. This follows significant losses at Jane Street after hedge fund Situational Awareness's issues. Regulators are examining trading activity and leverage use by the AI-focused fund. Information is being gathered on how bank exposures evolved during trading days.

The Bank of England and the US Federal Reserve are asking global banks about their exposures to large trading firms after turmoil at hedge fund Situational Awareness caused large losses at Jane Street, the Financial Times reported on Monday.

The AI-focused fund, run by former OpenAI researcher Leopold Aschenbrenner, was forced to sell most of its public equities portfolio to Citadel Securities after a sharp sell-off in AI and chip stocks. This contributed to Jane Street taking a $15 billion hit that month.

Also read: Microsoft CEO Satya Nadella to join OpenAI, Nvidia CEOs at Trump-Xi dinner

The central banks are now seeking information on the trading firms' risk appetite, how banks' exposure to them evolved throughout the trading day, and how risk controls operated, the FT report said, citing people familiar with the matter.

Reuters could not immediately verify the report. The US Federal Reserve, the Bank of England and Jane Street did not immediately respond to a Reuters request for comment outside of business hours.

Last month, the US Securities and Exchange Commission subpoenaed Wall Street banks, including Goldman Sachs, JPMorgan, Citigroup and Bank of America. It was examining Situational Awareness' trading activity and use of leverage following its near-collapse, including the trades that triggered margin calls and the fund's communications with lenders.

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Bank of EnglandUS Federal ReserveJane StreetSituational Awarenesstrading firms exposureJane Street lossJane Street newsCitadel SecuritiesGoldman SachsWall Street banks

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