Forbes – Hedge funds can disrupt the efficient functioning of markets if fund operators decide simultaneously to exit or take new positions, incoming Reserve Bank of Australia governor Glenn Stevens warned in a speech delivered in Hong Kong, a copy of which was obtained here.
‘Small countries, including Hong Kong, have on occasion felt as though hedge funds were singling them out for rough treatment, and that the resources available to hedge funds far exceed those of a small country seeking to maintain, for macroeconomic management reasons, a particular constellation of interest rates and exchange rates,’ Stevens, currently the RBA’s deputy governor said.
Stevens was speaking at a conference organised by the Hong Kong Monetary Authority and the Hong Kong Association of Banks,.
He said there needs to be sufficient disclosure from funds to allow investors to make informed judgements about the risks and returns.
This would ensure that the activities of investment managers which are not subject to prudential supervision do not threaten the financial viability of other institutions, such as banks, who are subject to supervision.
