Banks concentrate risk by accumulating hedge funds

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The emerging tendency for banks to accumulate hedge funds is a bad idea, according to John Succo, chief investment officer of Vicis Capital in New York. Market fragmentation prevents concentration of risk, he said speaking at the High-Performance Investing Symposium in Monte Carlo.

He warned against the "huge risk" of credit concentration, and that too much credit default swap business by leveraged firms is creating a potential problem, adding that gamma risk should only be held by unleveraged

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