Yellen Signals Scrutinizing Hedge Funds a Renewed FSOC Focus
- She says council has re-established group to study firms
- Pandemic showed funds’ leverage can increase stress, she says
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President Joe Biden’s council of financial regulators signaled a sharpened focus on hedge funds and whether their trading poses dangers to markets.
Treasury Secretary Janet Yellen, speaking at a Wednesday meeting of the Financial Stability Oversight Council, said the group has revived a task force on hedge funds so agencies can better “share data, identify risks and work to strengthen our financial system.” The council was briefed in a separate private meeting on how the funds performed during the Covid-19 crisis, she said, adding that their use of borrowed money added to instability last year.