Hedge funds not systemically risky, but UK regulator issues caveats

The UK's Financial Services Authority (FSA) says the low footprint hedge funds have in most capital markets means overall they pose a low systemic risk, but it has warned of a greater influence by the industry in areas such as convertible bonds, as well as commodity and interest rate derivatives.

The regulator paints a generally improved picture for hedge funds two years since the global financial crisis ended, after surveying about 50 regulated managers with $390 billion assets in March.

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