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No hedge fund now poses systemic risk-LTCM partner

Guardian.co.uk – No single hedge fund today poses a systemic risk to the global financial system, said a former partner at Long Term Capital Management (LTCM), as lawmakers continue to hammer out rules to control the industry.

Even though many funds are now much larger than LTCM, which collapsed in 1998 and received a $3.5 billion bailout to avert widespread financial chaos, Hans Hufschmid, currently chief executive at fund servicing firm GlobeOp, said prime brokers now act as an effective brake on hedge fund risk. "I find it hard to believe — I don’t think a hedge fund today is big enough to pose a systemic risk," he said.

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