The panel Congress created to review the financial markets and
regulatory system, following the passage of the $700 billion
bank bailout bill last fall, has come out in favor of greater
regulation of hedge funds.
In its initial report released Thursday, the Congressional
Oversight Panel called for greater oversight of the financial
industry, especially the "shadow banking system" that it
defines to include hedge funds, among others.
"Why does regulation matter? If we had had better regulation
we could have prevented the mess we are in today. Good
regulation has the power to channel investment into productive
economic activity, to make markets safer, and to prevent
financial meltdowns," said Elizabeth Warren, chair of the
panel. "We are at a crucial...