An unwillingness among the four leading US banks to lend cash, combined with a surge in demand from hedge funds for secured funding, could explain the spike in US money market rates and the sudden stress in the repo market beginning in September, the Bank for International Settlements said in a report dated Monday.

Cash available to banks for short-term needs, also known as the repo market, all but disappeared in September, and some rates shot as high as 10% on certain overnight loans, which forced the Federal Reserve to make an emergency injection of billions of dollars for the first time since the global financial crisis roughly a decade ago.