* Three common myths

AIMA explains to us three common myths persist about hedge funds in the policy debate.

(1) Hedge funds are unregulated
(2) They pose a risk to Europe's financial stability
(3) They caused or exacerbated the current financial crisis

The reasons for causing these misunderstanding seem to be the lack of : transparency of investment strategies and risk management, reporting obligations, disclosure of shareholder structure, supervision by public agencies, also the role of rating agencies and the danger of money laundering.

In reality, hedge funds and hedge fund managers are extensively regulated in Europe, and they neither pose threat to Europe's financial stability nor exacerbated the current crisis. In fact, the great diversity of asset classes and investment strategies used by hedge fund managers spreads the risk, they are also adding liquidity to markets under stress and cushioning market falls.

See detail: (AIMA) Hedge Funds: Is Regulation Needed?