Fed and BoE Probe Bank Exposure to Trading Giants Jane Street and Citadel

Key Facts

1The Bank of England's Prudential Regulation Authority and the Federal Reserve have stepped up scrutiny of global lenders' exposure to large trading firms.

2Regulators are inquiring about firms' risk appetite, intraday exposure evolution, and the robustness of risk controls.

The Federal Reserve and the Bank of England's Prudential Regulation Authority have stepped up scrutiny of global lenders' exposure to large trading firms, including Jane Street and Citadel Securities. According to the Financial Times, regulators are inquiring about firms' risk appetite and the robustness of risk controls regarding how exposure evolves intraday. The probe follows reports that Jane Street lost $15 billion in July, marking its first monthly decline in a decade.

The regulatory inquiry focuses on prime brokerage lending and leverage following the collapse of the Situational Awareness AI fund. In equity markets, Goldman Sachs (GS) closed at $936.36 on September 23, 2026, while Morgan Stanley (MS) closed at $198.39 on the same date. Bank of America (BAC) recorded a close of $56 on September 23, 2026, as markets weigh whether increased oversight will lead to tighter credit conditions for major market makers.