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Hedge Funds Lightly Regulated Today

“Currently, hedge funds are virtually unregulated,” said Rep. Henry Waxman, D-Calif., chairman of the House Committee on Oversight and Government Reform. “They are not required to report information on their holdings, their leverage, or their strategies. Regulators aren’t even certain how many hedge funds exist or how much money they control.”

Don’t Over-regulate Hedge Funds

Listen to George Soros, a current supporter of President-Elect Obama.

Soros, like the other hedge fund managers, agreed that increased regulation could be beneficial, but he warned against “going overboard with regulation.”

Andy Lo, an eminent Financial Economist at MIT suggests:

that regulators foster increased transparency within the financial industry and create a special public relations team to convey financial information to the general population.

“To the average American, the current financial crisis is a mystery, and concepts like subprime mortgages, CDOs, CDSs and the seizing up of credit markets only creates more confusion and fear,” said Lo.

Or in other words, have transparency and allow the market to sort the rest.