Are these people mad?
Secretive hedge funds will eventually be subject to the same supervisory rules as banks, under a tightening of Britain’s system of regulation.
The changes, which will require banks and other lenders to build up their reserves in healthy economic times, could become the basis for international efforts to overhaul regulation at the G20 summit in London on April 2.
The definition of a bank is an entity that borrows short and lends long. Hedge funds do not borrow short and lend long. Thus hedge fuhnds are not banks and should not be regulated the same way.
This is based more on the idea that you don\’t want to waste a good crisis. The politicians don\’t like hedge funds because they cannot control them. Thus they are going to try and control them under the guise of doing something about the banking system.