Money managers under the microscope
Regulators are going after the wrong target by trying to impose stricter rules on hedge funds, according to Nassim Nicholas Taleb, high-profile author of credit crisis hit The Black Swan.
Taking a decidedly negative view of banks, Taleb told the Hedge 2009 conference in London today that a bank is essentially “a utility with a compensation scheme”, which the public has to bail out if it fails.
In contrast, “hedge funds are a good thing” (not a phrase that is heard very often).
With the possible exception of LTCM, taxpayers haven’t had to bail out hedge funds which, when they have failed, have generally done so quietly with relatively little effect on the general public, he says.