The Bank for International Settlements has called for tougher rules to stop bond funds from amplifying risks to financial market stability and has thrown its weight behind calls for tighter supervision of blockchain-based decentralised finance.

The umbrella body for central banks around the world said in its latest quarterly review that action was needed after bond funds had been forced to sell assets “on an elevated scale” in March 2020. An abrupt and widespread rush to the exits from these funds added to coronavirus-induced volatility across fixed income markets that was relieved only by massive interventions by central banks, the BIS said.

The institution’s position adds to earlier proposals for new safeguards by the IMF, Financial Stability Board and the International Organization of Securities Commissions.