Hedge Funds Financial Stability
Survey by FSA Shows Hedge Funds Pose Limited Threat
The Financials Services Authority, the UK's financial regulatory body, surveyed hedge funds controlling over $380 billion in total assets to find out how big a threat the funds posed to financial stability. The results show that hedge funds are a "limited threat" to financial stability and have a proven ability to manage the liquidity of their assets and liabilities.Hedge funds pose a limited risk to the stability of the financial system, according to a survey by the U.K.’s Financial Services Authority.
Funds have a “strong ability to manage the liquidity of their assets and liabilities,” the FSA said in a report published on its website today. The regulator collected data on funds with a total of more than $380 billion under management.
Banks and other counterparties of hedge funds have “increased margining requirements and tightened other conditions on their exposures to hedge funds since the financial crisis,” according to the FSA report.
Hedge funds and private-equity firms have come under scrutiny from lawmakers who said they were partly to blame for the economic turmoil that followed the collapse of Lehman Brothers Holdings Inc. The European Union has approved measures to require hedge-fund managers to restrict bonuses and increase disclosure to regulators. Source
Related to: Hedge Fund Update
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