Andrew Lo on Hedge Fund Regulation and Risk

Andrew Lo Interview

Andrew Lo on Hedge Fund Regulation

Andrew Lo on Hedge Fund Regulation and RiskI recently came across a short interview with Andrew Lo on the hedge fund industry and what additional regulations should be put in place within the United States. Here is the article excerpt from this interview:

Let's talk hedge fund regulation. What sort of oversight is most appropriate?
We don't need more regulation; we need better regulation. The majority of the problems we see in the current crisis emanated not from the hedge fund industry, but from the banking sector, which is probably the most highly regulated industry in the world. The main theme of my work has been to create more transparency in the financial sector, because one of the problems that arose and is still causing problems in our banking system is the lack of transparency and the fear it breeds. One of the strongest kinds of fear is fear of the unknown. That's exactly where we're at today with people fearing what they don't know about "toxic assets," about defaults, about where some of these pricing models will lead us.

What should a new regulatory framework look like?

The major highlights are relatively straightforward. One is we ought to create some kind of a systemic risk oversight agency. I propose creating something like the National Transportation Safety Board for financial markets. source

Here is a past article on an interview with Andrew Lo: Andrew Lo | Galapagos | Hedge Fund Notes.

Read more regulation and compliance related articles within our law section: Hedge Fund Regulation Corner | Compliance & Law Notes.

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Tags: Andrew Lo, Andrew Lo Interview, Andrew Lo Hedge Funds, Andro Lo Research, Andrew Lo hedge Fund manager, Andrew Lo Hedge Fund Regulations, Andrew Lo from MIT

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