Hedge Funds

New York Fed expresses fears over rapid growth


New York Federal Reserve president and chief executive Timothy Geithner is among the regulators concerned about the rapid growth of the hedge fund industry. In a speech to the Economic Club of New York, Geithner said that while hedge funds overall can play a beneficial role in the U.S. financial system, the industry's rapid growth also poses risks, particularly in the form of many funds executing the same strategies simultaneously.

"While there may well be more diversity in the types of strategies hedge funds follow, there is also considerable clustering, which raises the prospect of larger moves in some