文档介绍：FINANCIAL STABILITY FORUM
19 May 2007
Update of the FSF Report on Highly Leveraged Institutions
Preface
This paper responds to a request from the G7 Finance Ministers and Governors at their
February 2007 meeting in Essen for the Financial Stability Forum (FSF) to update its 2000
report on Highly Leveraged Institutions (HLIs).
The 2000 Report was published in the wake of the Asian financial crisis and the
turbulence in global markets that panied the collapse of Long-Term Capital
Management (LTCM) in 1998. The Report focused on three main concerns:
• the systemic risks arising from excessive leverage in financial markets or at
individual HLIs;
• the impact on markets and regulated institutions of a sudden disorderly collapse of
an unregulated HLI; and
• the market dynamics issues relating to HLI activities, including the role of large
concentrated positions in amplifying market pressures in small and open economies.
To address these concerns, the report mended a package of measures to constrain
leverage, based largely on market discipline. The FSF did not mend direct
regulation of hedge fund leverage. Instead, mendations centred on:
• strengthening of risk management practices by HLI counterparties and HLIs;
• greater regulatory oversight of HLI credit providers;
• improved disclosure by HLIs and counterparties of their risk profiles; and
• enhanced market surveillance by national authorities to identify rising leverage and
possible concerns relating to market dynamics.
The FSF assessed progress in the implementation of these mendations in 2001 and
2002 and has since followed these and related issues closely.
This update focuses on financial stability issues relating to hedge funds; it does not
address investor protection issues associated with institutional or retail investments in
hedge funds.
FINANCIAL STABILITY FORUM
I. Executive Summary
Activity by hedge funds has expanded rapidly since the FS