They are not back, they have never been away. And it’s not just the hedge funds but also the regulated banks that gamble with such risks (although the former hold much more assets).

There is a good analysis from May 2024. Among others, it says:

According to financial data at the [U.S.] Federal Financial Institutions Examination Council (FFIEC), as of December 31, 2023, JPMorgan Chase held $3.227 trillion off-balance sheet, of which $528.5 billion is undefined and marked as “other.” To put that in perspective, $528.5 billion is the size of the assets of the seventh largest bank in the United States and yet the public has no idea what the $528.5 billion off-balance sheet at JPMorgan Chase is made up of or what kind of risks it presents.

The article also deals with possible solutions. One major issue would be to prohibit deposit-taking banks from merging with investment banks, a measure that has been introduced in the U.S. as a response to the Great Depression in the 1930s and was ditched in the 1990s. The U.S. must urgently reintroduce such a law, and Europe and the rest of the world must follow.