Fed's Warsh on hedge fund risks

Addressing the House's Committee on Financial Services, Kevin Warsh, a member of the board of governors of the Federal Reserve, set out what the Fed sees as the risks hedge funds pose to the financial system.

Warsh began by noting that hedge funds have brought benfits to financial markets and have helped to reduce systemic risk.

However, the "recent growth of hedge funds presents some formidable challenges to the achievement of public policy objectives, including significant risk-management

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