Fri, Aug 18, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Rand Corporation study finds hedge funds still have disruptive potential for US financial system

Friday, September 21, 2012

Beverly Chandler, Opalesque London: A new study published by The Rand Corporation entitled Hedge Funds and Systemic Risk, authored by Lloyd Dixon, Noreen Clancy and Krishna B. Kumar, finds that although hedge funds were not a leading cause of the recent financial crisis, they do have the potential to contribute to disruptions of the U.S. financial system going forward.

Dixon and his colleagues look back at recent hedge fund history to find context for their study. They refer to the collapse of Long-Term Capital Management (LTCM) in 1998 which raised awareness that hedge funds could be a source of risk to the entire financial system, plus the heavy investing by hedge funds in many of the financial instruments at the heart of the financial crisis of 2007–2008 and write: "It is appropriate to ask whether they contributed to the crisis."

This report explores the extent to which hedge funds create or contribute to systemic risk; the role hedge funds played in the financial crisis; the consequences of the 1998 failure of LTCM, and whether and how the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 addresses the potential systemic risks posed by hedge funds.

Dixon and his team reflect that despite accounting for a growing proportion of financial market activity for some time, their structures as private investment pool......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Albright Capital puts a value lens on emerging markets[more]

    Bailey McCann, Opalesque New York: Over the past decade, investors have steadily increased investments in emerging markets private funds. Allocations to the cohort have increased from $93 billion in December 2006 to $564 billion in September 2016, according to data from research firm Preqin. Howe

  2. Comment: "Long-Term Investing": What managing drawdown risk can do to your long-term returns[more]

    Matthias Knab, Opalesque: Real Investment Advice writes on Harvest Exchange: Last week, I was having lunch with a prospective portfolio management client discussing the curre

  3. Jasper Capital International joins Hedge Fund Standards Board[more]

    Komfie Manalo, Opalesque Asia: Diversified and systematic investment firm Jasper Capital International has become the second China-based signatory to the Hedge Fund Standards Board (HFSB), an organization that brings hedge fund managers and investors together to set standards for the hedge fund i

  4. Investing - Hedge-fund honchos including David Tepper are loading up on Alibaba, Billionaire hedge fund manager Stanley Druckenmiller is betting big on the Chinese consumer, Big-name U.S. hedge funds shed healthcare stocks during the rally in second-quarter, U.S. hedge funds bearish on FAANG stocks in second-quarter, Hedge fund titan Viking Global made a $680 million bet on scandal-plagued Wells Fargo[more]

    Hedge-fund honchos including David Tepper are loading up on Alibaba From CNBC.com: David Tepper's Appaloosa Management and three other he ge funds took new stakes in Chinese e-commerce giant Alibaba in the second quarter, according to the latest quarterly filings. Appaloosa disclos

  5. FinTech - Danger: Crowdfunding on the wrong platform could force you to go public[more]

    From LinkedIn.com: Some equity crowdfunding platforms are putting startups at serious risk. Working with a platform that doesn't structure your deal appropriately could jeopardize your ability to raise future capital or worse, force you to become a public reporting company. The emergence of eq