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The world’s best HEDGE funds have responded to the plans of global regulators to limit their use of financing borrowing, which investors say is wrongly blamed for the recent Wobbles in the financial market.
Bodies representing large hedge funds – including Millennium management, Izzy Englander, Citadel Ken Griffin, Elliott Management Singer, AQR AQR, Elliott Singer, attacked financial policy proposals to limit how much influence and forces them to be more open to it.
Lobbying offensive sets a showdown between some of the most powerful investors in markets and the world’s best financial regulators due to rapid growth Hedge funds and other forms of alternative finances outside the traditional banking sector.
Central bankers and regulators have identified hedge funds and other nebaric actors who use the impact, but enjoy easier regulation than banks as one of the biggest risks of the financial system.
Hedge funds use lever to increase refund. One of the most controversial HEDGE Fund stores, treasury trade, includes a short position on Futures cash register while borrowing money from a bank to occupy a cash register in cash, in fact, betting two products will converge. By launching both sides of the store, hedge funds can increase what would usually be minus.
Global regulators have warned that if trade with a major influence like a basic trade collapses, it could affect treasury prices and global markets.
The Committee on Financial Stability, which brings together top ministers of finance, central bankers and regulators for coordinating politics, has proposed a number of measures to suppress influence on Hedge funds and other Neban groups.
However, the bodies of hedge funds attacked these prop
“The application of the artificial limit that is conceived in the regulator on the impact of the impact would cause more harm than the benefit,” said Jillien Flores, head of government jobs in the association of managed funds, which represents the largest hedge funds. She said such moves were likely to “introduce unnecessary friction and reduce efficiency and liquidity in markets.”
Flores said that 1,000 alternative property managers closed “everything without placing system problems each year”, adding that they “are less used than banks and have more liquid assets, reducing the risk of liquidity”, so they should not be subjected to the same rules as banks.
Jiří Król, Deputy Head of Alternative Investment Management Association, criticized the FSB for “trying to fit anecdotic evidence to theoretical hypotheses” and said that events on market stress are guilty of Hedge funds “do not support this claim”.
Both groups rejected the FSB plan to force hedge funds to discover more details about their impact on banks and other parties. MFA warned that the discovering of “otherwise confidential investment positions would” allow “copying” to mimic the fund strategy.
The most common way of hedge funds give their stores through the main relationship with a great bank. Banks are borrowed by hedge funds, for example, the purchase of shares, seeking the amount of margins from the HEDGE Fund that corresponds to the identified risk, in fact the borrowing of the Hedge Fund.
Critics claim that because of close relations to lending to banks, because of banking sectors and risks to initiate another crisis. Default family office Archegos 2021 caused billions of dollars of losses at banks, including Credit suisse.
Authorities show a small sign to take away from their plans. “The presence of influence can create vulnerability, especially when it is poorly managed, lacking in transparency or is concentrated,” said Sarah Pritchard, Executive Director of British Authority for Financial Behavior, in speech this week.
“In these cases, when a shock occurs, what usually benefits the economy is to the economy can suddenly become an amplifier and a cause of loss of confidence,” said Pritchard, who is also co-owner of the FSB Working Group, which coordinated its proposals. “For regulators, that’s a real concern.”
