Hedge fund gurus say some oversight needed
Published: Fri, Nov. 14, 2008 12:30AM
Modified Fri, Nov. 14, 2008 02:21AM
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closeWASHINGTON -- Five prominent hedge fund managers on Thursday told Congress they support a new central exchange to open the murky world of some complex investments partly blamed for the global financial crisis.
The billionaires testified at a House hearing examining the role of hedge funds in the crisis, and the risks that critics say they pose to the financial system. Hedge funds, vast pools of capital holding an estimated $2.5 trillion in assets, operate mostly outside of government supervision.
The House Oversight and Government Reform Committee is attempting to assess the role of hedge funds in the financial crisis and what could go wrong with them in the future, said its chairman, Henry Waxman, D-Calif. "Some say hedge funds have become a shadow banking system," he said.
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Investor and liberal activist George Soros, who runs a hedge fund, testified that new regulations were needed to gauge the underlying financial strength of banks. But he warned against "going overboard" with regulations that could do more damage than good to the financial system.
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Staff writer Jack Hagel; Staff writer John Murawski; Staff writer Jonathan B. Cox; Staff writer David Ranii
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