Derivative Clearinghouse no magic Bullet?

Harvard's Mark Roe makes a valid point when he doubts the benefits of relying on central clearing as a tool for the reduction in counter party and systemic risk in the financial markets. We argue that stress tests have to be designed so that even dramatic price changes like those experienced in the 1987 stock market crash of in the recent credit crunch pose no risk to the system. This may well mean that paltry levels of margin are on the way out. 20 percent and more may become the 'new normal'

Hedge Fund Wolves destroyed Bear Stearns?

The controversy about the role hedge funds have played - and may continue to play - in the credit and economic crisis that has erupted in 2007 can only be settled by an open and forensic analysis of all transactions entered by hedge funds during the period. All other discussions are based on guesswork, innuendo or comments from enemies or supporters of the industry with an axe to grind.

Private Equity Investment in Banks poses Risk

The wisdom of allowing 'Private' Equity firms to invest in the regulated and highly sensitive banking sector has to be questioned. Basically these firms - which are anything but private as most of their money comes from Joe Public - are leveraged players that look for the 'exit' the moment they invest in a business. As a consequence they cannot claim to be considered serious long-term investors. In addition, the 'fund' structure allows them to escape from the restraints faced by real business companies, it gives them the opportunity to drop any of their investment companies like a hot potato if things do not work out.