Central banks globally are intensifying their examination of hedge funds amid concerns over their expanding role and potential impact on financial stability. The increased scrutiny reflects a growing recognition of the need to monitor and manage risks associated with these investment vehicles.

Regulators are focusing on gaining a deeper understanding of hedge fund strategies, leverage, and risk management practices. This enhanced oversight is intended to identify and address potential vulnerabilities that could affect the broader financial system.

The move comes as hedge funds manage increasingly larger pools of capital and engage in more complex trading activities. Central banks aim to stay ahead of potential systemic risks by proactively monitoring these funds.