My understanding is that MF Global actually used their clients funds to purchase European soveriegn debt using a procedure called re-hypothecation. Apparently there are limits on this in the U.S. but not in the UK and they used their UK sub to maximize the leverage created by the strategy. The IMF estimates that U.S. banks have raised as much as $4 trillion through this strategy.

http://newsandinsight.thomsonreuters.com/Securities/Insight/2011/12_-_D…