Fed's Bernanke on hedge funds and systemic risk

In the speech 'Hedge funds and systemic risk' given on 16 May Ben Bernanke of the Federal Reserve said financial authorities must stay attuned to any potential risks posed by the growth of hedge funds, an investment domain of the wealthy that has become more popular with smaller investors.

"Authorities should and will try to ensure that the lapses in risk management of 1998 do not happen again," Bernanke said.

"Direct regulation may be justified when market discipline is ineffective at

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