The Bank for International Settlements warned that central banks and investors need to address potential vulnerabilities from rising leverage across multiple markets, citing the near-collapse of the Situational Awareness fund in July as a cautionary example. BIS Financial Stability Policy Head Gaston Gelos said hedge funds are now "at the core of core markets," creating a fragile setup dependent on high leverage and liquidity that can disappear quickly. BIS Economic Analysis and Statistics Head Frank Smets said market stress has not yet materialized, but warned that resilience in risk assets may not be sustainable.