Closing the Regulatory Gap: Derivatives and the Hedge Fund Industry

``I think hedge funds and other large liquid pools of capital ought to reveal their risk positions to a risk regulator charged with guarding against excess risk to the financial markets. That regulator should be able to aggregate the risk positions, know about the counterparty risk positions and anticipate strains on the markets. If the hedge funds are not regulated, then it's hard for the financial risk regulator to know about their risk positions.''