NY Fed issues hedge fund warning

In what Reuters describes as its "sternest warning to date" on the state of the hedge-fund business, the Federal Reserve Bank of New York said Wednesday 2 May that the funds could represent the biggest risk for a financial crisis since 1998.

"Recent high correlations among hedge fund returns could suggest concentrations of risk comparable to those preceding the hedge fund crisis of 1998," according to a paper by Tobias Adrian, capital markets economist at the NY Fed, published in the Current I