
FSF warns of hedge fund risks
The FSF also warns that competition is putting margins under pressure, and that the absence of concentration limits is leading to increased concentration of market-making in certain sectors. It adds that many new and complex products remain untested under stress conditions.
The report, issued at the request of G7 finance ministers and central bank governors, is an update of the forum’s 2000 report on highly leveraged institutions. The forum consists of central bankers, regulators and international bankers from around the world, and is supported by the Bank of International Settlements in Basel.