With some 300 fund managers, traders and administrators in the Managed Fund Association audience, Anthony W. Ryan, assistant secretary of the U.S. Department of Treasury for financial markets gave a warning: with $1.4 trillion in assets under management in the hedge fund community, managers need to be vigilant to avoid any actions that could cause a “systemic event.”
Ryan, a former fund manager who joined the Treasury department last December, noted that the President’s Working Group missive release last February came to the conclusion that “stakeholders,” which include fund managers, lenders and counter parties, all those who manage private pools of capital, need strong market discipline, and that mixed with regulatory policy can reduce the chance of a systemic event.
He noted that a “perfect storm” for an event could include a situation that allowed easy credit, highly correlated strategies, connected lenders, inadequate information and undeveloped markets.
