Fed governor says hedge funds present systemic danger
Speaking at a hearing of the US House of Representatives’ Committee on Financial Services on hedge funds and systemic risk, Warsh said: “The recent growth of hedge funds presents some formidable challenges to to market participants. If market participants prove unwilling or unable to meet these challenges, losses in the hedge fund sector could pose significant risks to financial stability.”
Warsh said that the Federal Reserve has considered introducing new regulation to:
• review firms' stress
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