Goldman Sachs invited a group of top hedge fund executives to a 500-acre country estate outside London in February. According to Sina Finance, the message was clear: they were no longer rivals, but one of the bank's most important client groups.

The article says U.S. banks are posting record profits in trading businesses, even though the actual trading is increasingly done by firms such as Jane Street and Citadel Securities. Their heavy demand for financing has made them prized borrowers and a major source of bank revenue.

Barclays' head of global liquidity financing, Mike Webb, said banks struggle to compete in market making, but financing remains a traditional strength. The article says hedge fund borrowing from banks has tripled since 2020, and Coalition Greenwich expects revenue from equity and fixed-income prime brokerage to reach $47.9 billion this year.

The report says the business has become more concentrated around large multi-manager hedge funds and proprietary trading firms, including Citadel, Millennium Management, Point72, Jane Street, and Hudson River Trading. It also says the Bank of England reported in July that prime brokerage assets rose about 40% last year.

Financial Stability Board Deputy Secretary General Martin Moloney said it would be naive to think strong bank capital alone would solve the problem. He added that competition is eroding risk safeguards and warned that the risks can spread across borders and trigger a larger crisis in the financial system.