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…

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About Doug Merrill

Freelance journalist based in Tbilisi, following stints in Atlanta, Budapest, Munich, Warsaw and Washington. Worked for a German think tank, discovered it was incompatible with repaying US student loans. Spent two years in financial markets. Bicycled from Vilnius to Tallinn. Climbed highest mountains in two Alpine countries (the easy ones, though). American center-left, with strong yellow dog tendencies. Arrived in the Caucasus two weeks before its latest war.

2 thoughts on “Questions You Don’t Want to Hear in Financial Markets

  1. 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. 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.

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