Hedge Funds and Global Financial Crisis: Is There A Link?
Most people who move outside financial circles do not know much about hedge funds. But most would have an idea that since September 2008, the greatest financial crisis to emerge since the Great Depression had unleashed unexpected recessionary misery on their investment portfolio, job stability and faith in the financial markets.
Some might have even blamed hedge funds for causing the financial meltdown, especially if negative publicity over the Madoff fallout could have clouded retail investors' vision.
However, it has been noted that securities regulators generally recognise that the current crisis in financial markets is not a hedge fund driven event.
Hedge funds actually made significant contributions to the financial markets. How? Hedge funds contribute to market liquidity, price efficiency, risk distribution and global market integration.
Of course, with heightened scrutiny on financial systems all over the world, the crisis has given regulators the opportunity to consider the systemic role hedge funds may play and the way in which regulatory risks may pose to the oversight of markets and protection of investors.
Thanks for visiting Hedge Fund Hedge Fund.
