Eu­ro­zone na­tions turn to hedge funds for bor­row­ing

Kathimerini English - - Focus -

LON­DON (Reuters) – Eu­ro­zone gov­ern­ments are in­creas­ingly re­ly­ing on hedge funds to help them meet their bor­row­ing needs, which risks leav­ing them vul­ner­a­ble to a debt mar­ket sell-off driven by a class of in­vestors dubbed “fast money” for their spec­u­la­tive ap­proach. With banks play­ing a less ac­tive part in the sov­er­eign debt mar­ket be­cause of pres­sures on their bal­ance sheets, sev­eral coun­tries have turned to hedge funds to sell their tar­geted amount of bonds, ac­cord­ing to data, of­fi­cials and bankers. Hedge funds tend to look for quick re­turns on in­vest­ments, which could in­crease the volatil­ity of gov­ern­ment bond

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