WEST PALM BEACH, FL (www.hedgeco.net) – A governing official of the European Central Bank council said in a press conference that Hedge fund risks to the European Financial Market stability may havegone up from 2004. According to Tommaso Padoa-Schioppa, there is a concentration of risks resulting from some segments of the unregulated financial institutions. The problem according toPadoa-Schioppa, is that significant number of new hedge fund managers recently came to the markets and are positioning in an increasingly similar fashion.
Padoa-Schioppa said in a press conference on Tuesday that, “The crowding of hedge funds in similar types of assets and investments may have increased.� Padoa-Schioppa�s comments were made after the release of semi-annual report of the European Central Bank�s Stability Review Report.
Padoa-Schioppa also remarked that there may be other risks to the European financial stability, such as sudden, �reassessment of risk or asset price corrections.� He explained that already there may have been housing bubbles in some countries already. The ECB governing Council member however did not name such circumstances and countries.
He also spoke about the unwinding of global imbalances; he described the process as unruly and disorderly. Padoa-Schioppa was also concerned about the issue of the persistent high oil prices. It was his views that oil prices may remain at such levels partly due to the demand coming from Asian countries such as China and India.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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