Questions You Don’t Want to Hear in Financial Markets

From Bloomberg, via Calculated Risk and Brad DeLong:

“How many other hedge funds are holding similar, illiquid, esoteric securities? What are their true prices? What will happen if more blow up?”

When London owes its place as financial capital of the world at least in part to a slightly looser regulatory structure than New York, and things like this are happening in New York…

This entry was posted on Friday, June 22nd, 2007 at 3:03 pm and is filed under A Fistful Of Euros, Europe and the world. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Aidan Kehoe Says:
   June 22nd, 2007 at 4:01 pm

   My understanding was that the looser financial regulation in London was mostly a question of making investments abroad easier. Oh, and the relatively recent Sarbanes-Oxley thing.

   The links in your feeds and on your front page to entries without categories are broken, by the way; they should be http://fistfulofeuros.net/afoe/questions-you-dont-want-to-hear-in-financial-markets , not http://fistfulofeuros.net//questions-you-dont-want-to-hear-in-financial-markets .

2. Doug Merrill Says:
   June 25th, 2007 at 8:22 am

   Thanks, Aidan, got the category bit sorted out.

   And it’s not as if Sarbanes-Oxley is particularly onerous. It was a bare-bones minimal reform that got passed in the wake of Enron.

   London has a combination of large liquidity and laissez-faire that’s good for business right now. (I follow biotech a fair amount, so I’m thinking of AIM, but I suspect that it’s an example rather than an exception.) One of the questions is how well London can respond when a scandal comes. Because with that much money sloshing around, there’s always a scandal eventually.