Forbes – Hedge funds present a risk to the financial markets and tighter regulations are needed, a majority of private economists said in a new survey conducted by the onlineedition of the Wall Street Journal.
In a survey conducted during Oct 6-10, more than half of respondents in the WSJ.com survey — 23 out of 41 who answered the question — said regulation and supervision ofhedge funds is too light. Sixteen economists said it was ‘just right’ and two said it was ‘too tough.’
About 60 pct said hedge funds pose a risk to financial markets, the Journal reported in its online edition.
The explosive growth of hedge funds and their aggressive use of borrowed money have raised alarms about whether a financial crisis could set off a chain reaction ofhedge-fund failures that could cause chaos in the financial system.
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