Hedge funds could cause systemic risks, says G7

The hedge fund industry has come under attack from the G7 finance ministers. At their February meeting, Peer Steinbruck, the German finance minister, warned that hedge funds could pose "systemic risks" to financial stability and trigger a "vicious circle" of problems similar to the crises of the 1990s. But the Alternative Investment Management Association (Aima) - the leading global hedge fund and alternative investment industry association - responded robustly. "G7 members need to have better understanding on hedge fund trading activity," it said. Steinbruck said he recognised that hedg...