Hedge Funds: What Do We Really Know?

By Barry J. Eichengreen, Donald J Mathieson

September 27, 1999

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Format: Chicago

Barry J. Eichengreen, and Donald J Mathieson. Hedge Funds: What Do We Really Know?, (USA: International Monetary Fund, 1999) accessed November 21, 2024

Summary

Each episode of volatility in financial markets heightens the attention of government officials and others to the role played by the hedge fund industry in financial market dynamics. Hedge funds were implicated in the 1992 crises that led to major exchange rate realignments in the European Monetary System, and again in 1994 after a period of turbulence in international bond markets. Concerns mounted in 1997 in the wake of the financial upheavals in Asia. And they were amplified in 1998, with allegations of large hedge fund transactions in various Asian currency markets and with the near collapse of a major hedge fund, Long-Term Capital Management (LTCM). This paper discusses the size, number, and investment styles of hedge funds, and their interactions with global financial markets. It reviews the present state of their supervision and regulation, and assesses various suggestions for regulating them more closely, often as part of new regulatory approaches to the larger financial markets of which hedge funds are but a small part.

Subject: Banking, Commercial banks, Financial institutions, Hedge funds, Mutual funds, Securities, Stocks

Keywords: Commercial banks, EI, Forward sale, Fund, Global, Hedge fund, Hedge fund customer, Hedge fund strategy, Hedge funds, Hedge funds' activity, Hedge fund's loss, Institutional investor, Investment activities of a hedge fund, Long-Term Capital Management, LTCM episode, LTCM rescue, LTCM situation, Managed futures, Market, Mutual funds, Regulation of the hedge fund industry, Securities, Stocks, Total borrowing

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Economic Issues No. 1999/002
Stock No:

EIIEA019
ISBN:

9781557758491
ISSN:

1020-5098

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