November 13, 2008

Hedge Funds and the Financial Market

Key materials
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In his testimony, Shadab discusses three important findings. First, hedge funds did not cause the financial crisis and are in fact helping to mitigate its damage and save taxpayers money. Second, hedge funds’ short-selling activities have helped draw attention to the poor management and investment decisions of financial companies in recent years. Finally, existing laws and regulations should be strictly enforced against hedge funds and their managers, but changing how hedge funds are regulated could actually undermine the interests of investors and increase economic instability. If hedge funds are significantly restricted their ability to develop innovative investment strategies, or are required to reveal their strategies to competitors, we all stand to lose from the unique benefits that the funds bring to the economy.

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