Jeremy Warner: Hedgies seem to have won a stay of execution
Friday 03 April 2009
Yet the truth of the matter is that they had very little to do with the present crisis and, in the scale of things, are hardly of any importance at all. Most of them are only mildly leveraged, while even the most debt- geared of the lot are not nearly as leveraged as the average bank.
None of them has had to be bailed out by the taxpayer, and there is no evidence that they contributed to the systemic collapse of the banking industry. Even the totality of their assets doesn't match the balance-sheet size of a major bank such as Royal Bank of Scotland.
As suggested by Lord Turner, those that behave like banks will in future be regulated like banks, with capital requirements to match. That's going to make the leveraged returns of the past much more difficult to achieve, yet these have become virtually impossible over the last two years in any case. Hedge funds were some of the first victims of banking deleverage.
As for regulating hedge funds more closely, it looks as if the G20 will adopt the system already operated in the UK, where hedge fund managers are subjected to regulatory oversight by the Financial Services Authority even though their funds may be based offshore. A voluntary code of conduct on transparency, risk management and governance provides further protection for investors.
It's the lot of the poor hedgie that he's going to be demonised whatever he does. But it doesn't look as if he'll be drummed out of business altogether.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 The biggest first date turnoff has been revealed
- 5 German man found living with 300 rats in tiny apartment
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Budget 2015: George Osborne to axe subsidies for higher income earners in social housing
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...