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Don’t blame the hedgies

Billionaire hedge-fund managers didn’t cause the crisis, so tougher regulation would be a mistake

By Jonathan Ford   July 2010

Michael Douglas in Wall Street: bankers, not hedge-fund managers, are the villains

Hedge funds are the bogeymen of international finance. In the past two years they have been denounced for destroying Bear Stearns and Lehman Brothers, taking the entire financial system to the edge of a precipice. They now stand charged by European politicians with threatening the very existence of the euro. Ministers talk openly of a destructive hedge-fund “wolfpack” and call for legislation to curb it.

Regulators have long worried that a hedge-fund collapse might damage the financial system. Their ability to move markets has infuriated politicians: Malaysia’s…

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