Imagine our surprise. The FSA leaping to the defence of hedge funds. Not two minutes after they were broadly suggesting the short-selling funds were acting maliciously (and illegally) in spreading liquidity scare-stories about the UK’s banks.
But here it is. Dan Waters, director of retail policy told the European Parliament, that:
Hedge funds are neither catalysts or drivers of current market turmoil.
The indirect approach of supervising hedge funds is the appropriate and cost effective one, he added.
Just as the industry was getting its defences mobilised. Industry association AIMA on Tuesday hit back against what it called “unreasonable criticism” despite the entry of funds into the mainstream of the asset management industry.
Chief executive Florence Lombard said:
Disappointingly, hedge funds are often made the focus of media attention when any suspicions of market irregularities arise. It is vital that the legitimate shorting of assets should not be confused with alleged market abuse by, as yet, unidentified players in the market.
In other words, less of the ‘bank robber‘ chat please.