{"id":4538,"date":"2006-06-06T00:00:00","date_gmt":"2006-06-06T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"european-central-bank-sees-hedge-funds-as-risky","status":"publish","type":"post","link":"https:\/\/staging.hedgeco.net\/news\/06\/2006\/european-central-bank-sees-hedge-funds-as-risky.html","title":{"rendered":"European Central Bank sees Hedge Funds as Risky"},"content":{"rendered":"<div class=\"writeboardbody\">  WEST PALM BEACH, FL (HEDGECO.NET) &#8211; The European Central Bank (ECB) is warning traders that hedge funds have created a \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cmajor risk\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d to global financial stability. Franz M\u00c3\u0192\u00c2\u00bcntefering, who is the  deputy German chancellor, described them as \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201clocusts\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d.  <\/p>\n<p>    In an interview with Scotland\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s Sunday Herald, the <span class=\"caps\">ECB<\/span> put that risk right up there along with a major bird flu pandemic in terms of shocks that could trigger a    disruption in the financial markets. It warns of the risk of an \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cidiosyncratic collapse of a key hedge fund or a cluster of smaller funds\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d.  <\/p>\n<p>    The <span class=\"caps\">ECB<\/span> review also pointed out that current hedge funds work in a herd-like way, investing in the same kind of assets returns, therfore able to create a domino-like    effect. This behavior was seen just before the collapse of Long-Term Capital Management in 1998. That company was developed by the combined brainpower of Nobel Prize winning economists, and even    that did not stop its spectacular failure.  <\/p>\n<p>    But the <span class=\"caps\">ECB<\/span> has been easier on hedge funds than most. Along with Germany\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s Bundesbank and its proposed self-regulatory strategy, the International Monetary Fund, and the    Bank of England have had a less-alarmist approach to the possible impact of hedge funds on the global financial system.  <\/p>\n<p>    Alex Akesson<br \/>    Contributing Writer<br \/>    HedgeCo.Net<br \/>    Email: Editor@hedgeco.net  <\/p>\n<p>    HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge    Funds!  <\/p>\n<p>    <strong>Be sure to check out our sister sites. <a href=\"http:\/\/www.hedgefundlounge.com\/\">www.hedgefundlounge.com<\/a>, <a href=\"http:\/\/www.hedgefundtools.com\/\">www.hedgefundtools.com,<\/a><\/strong>    and <a href=\"http:\/\/www.hedgefundemployment.com\/\"><strong>www.hedgefundemployment.com.<\/strong><\/a>  <\/p>\n<p>    &nbsp;  <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>WEST PALM BEACH, FL (HEDGECO.NET) &#8211; The European Central Bank (ECB) is warning traders that hedge funds have created a \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cmajor risk\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d to global financial stability. Franz M\u00c3\u0192\u00c2\u00bcntefering, who is the deputy German chancellor, described them as \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201clocusts\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d. In an [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4538","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/4538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=4538"}],"version-history":[{"count":0,"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/4538\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=4538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=4538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=4538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}