Fed, BOE tighten scrutiny of bank exposure to trading firms after Jane Street losses

The story here is supervisory, not market: the Fed and BOE are treating trading firms' counterparty risk as a bank-safety question rather than a private matter between desks. That matters most for lenders that extend prime brokerage, margin and financing to quant traders, and for the trading firms whose funding costs and credit terms depend on those relationships. Whether this scrutiny stays a data-gathering exercise or hardens into capital or exposure limits is the open question, and it will shape how tightly leveraged trading strategies can be financed.