Many of world’s largest hedge funds face UK stress test

Participants also including banks and pension funds will have to reveal how activities could harm financial system

Many of the world's largest hedge funds will reveal whether their investment activities risk amplifying economic shocks and harming the UK's financial system, after being recruited into the first-ever stress tests involving the shadow banking sector.

The Bank of England has released the names of more than 50 City institutions taking part in the exercise, which will measure the ways that banks and non-bank financial institutions - often referred to as the shadow banking sector - affect financial stability.