Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154487
Authors: 
Garbaravicius, Tomas
Dierick, Frank
Year of Publication: 
2005
Series/Report no.: 
ECB Occasional Paper 34
Abstract: 
The paper provides an overview of the hedge fund industry, mainly from a financial stability and European angle. It is primarily based on an extensive analysis of information from the TASS database. On the positive side of the financial stability assessment, hedge funds have a role as providers of diversification and liquidity, and they contribute to the integration and completeness of financial markets. Possible negative effects occur through their impact on financial markets (e.g. via crowded trades) and financial institutions (e.g. via prime brokerage). Several initiatives have been launched to address these concerns and most of them follow indirect regulation via banks. If any direct regulation were to be considered, it would probably have to be implemented in a coordinated manner at the international level. At the EU level there is currently no common regulatory regime, although some Member States have adopted national legislation.
Subjects: 
Asset management
crowded trades
financial regulation
financial stability
hedgefunds
prime brokerage
risk management.
JEL: 
G15
G18
G21
G23
G24
Document Type: 
Research Report

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