Money managers under the microscope
For all the political noise about hedge fund regulation, today’s Turner review looks like a relatively easy set of rules for the industry to stomach.
In his 126-page document, mostly about the banking sector, FSA chairman Adair Turner says the watchdog will demand more information from hedge funds and says regulators should be able make rules in areas such as capital and liquidity if hedge funds start to pose systemic risks or become “bank-like” in their activities.
And while Turner points out hedge funds can pose systemic risks, he notes the FSA’s already-extensive regulation of hedge fund managers.
Significantly, he clearly draws a distinction between the activities of hedge funds and banks, pointing out that hedge funds have tended to be much less leveraged.