To be sure, the slightly more than 8,000 known hedge funds worldwide increase liquidity in financial markets and assume risks for which there would otherwise be no buyers. Hedge funds also account for about forty percent of turnover on the London and New York stock exchanges. For a long time, however, hedge funds were subject to virtually no supervision, even though they are usually closely linked to banks. Supervision in Germany did not begin until 2004. In the U.S., the Securities and Exchange Commission (SEC) introduced a registration requirement for funds above a certain volume and investment periods of less than two years. The G20 summit in early April 2009 decided to regulate hedge funds like banks in the future. – See Supervision, indirect. – Cf. 2004 Annual Report of BaFin, p. 18 f., p. 89 (difficulties of risk measurement for funds of hedge funds), p. 182 ff. (licensing issues), BaFin Annual Report 2005, p. 150 f. (licenses, on-site inspections), p. 152 (hedge funds and financial stability), BaFin Annual Report 2006, p. 37 (valuation of assets of hedge funds), p. 171 f. (fraud cases), BaFin Annual Report 2007, p. 168 f. (Regulation of Hedge Funds; Position of Prime Brokers), Annual Report 2008, p. 196 f. (Hedge Fund Supervision in the Financial Crisis), Annual Report 2009 of BaFin, p. 211 (International Efforts for Stricter Regulation), and the respective Annual Report of BaFin, section “Supervision of Securities Trading and Investment Business,” Financial Stability Report 2012, p. 67 ff. (Shadow Banking Sector as a Whole and its Risks).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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