CayCompass – Hedge funds may play an even more prominent role in transmitting shocks to the rest of the financial market and amplifying systemic risk than previously thought, according to a study published by the U.S. Federal Reserve Bank of San Francisco.
Until recently, hedge funds were believed to have played only a small part in the 2007 financial crisis during which commercial banks, hedge funds and investment banks suffered huge losses from investments in housing-linked assets in the United States.
