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FSR
 
FINANCIALSTABILITY REVIEW
 
 APRIL 
 
2007 
109–010
SPECIAL ISSUE
HEDGE FUNDS
 
“No part of this publication may be reproduced other than for the purposes stipulated in Article
 L.122-5.2° and 3° a) of the Intellectual Property Code without the express authorisation of the Banquede France or, where applicable, without complying with the terms of Article L.122-10. of the said code.” 
© Banque de France - 2007ISSN 1637-4681
www.banque-france.fr
 
C
ONTENTS
Banque de France Financial Stability Review: Special Issue on Hedge Funds No. 10 April 2007 3
|F
OREWORD
5
|A
RTICLES
Hedge funds, credit risk transfer and financial stability
R
OGER
T. COLE, G
REG
FELDBERG, D
AVID
LYNCH,
 Board of Governors of the Federal Reserve System
7
The evolution and regulation of hedge funds
A
NDREW
CROCKETT,
 JPMorgan Chase International
19
Regulating hedge funds
J
ÓN
DANÍELSSON
AND
J
EAN
-P
IERRE
ZIGRAND,
 London School of Economics and Financial Markets Group
29
Hedge funds and financial stability
M
ARIO
DRAGHI,
 Financial Stability Forum and Banca d’Italia
37
Hedge funds and systemic risk
R
OGER
FERGUSON
AND
D
AVID
LASTER,
Swiss Re
45
Hedge fund replication strategies: implications for investors and regulators
W
ILLIAM
FUNG,
 London Business School
D
AVID
A. HSIEH,
 Duke University
55
Hedge funds and prime broker dealers: steps towards a “best practice proposal”
P
HILIPP
M. HILDEBRAND,
Swiss National Bank
67
Transparency requirements and hedge funds
C
ALLUM
M
C
CARTHY,
UK Financial Services Authority
77
Risks and return of banking activities related to hedge funds
J
EAN
-P
IERRE
MUSTIER,
Société Générale Corporate
&
Investment Banking 
A
LAIN
DUBOIS,
 Lyxor Asset Management 
85
Indirect supervision of hedge funds
D
ANIÈLE
NOUY,
Commission bancaire (French Banking Commission)
95
Hedge funds: what are the main issues?
105
C
HRISTIAN
NOYER,
 Banque de France
Monitoring hedge funds: a financial stability perspective
L
UCAS
D. PAPADEMOS,
 European Central Bank
113
The world of hedge funds: prejudice and reality –
The AMF’s contribution to the debate on alternative investment strategies 
M
ICHEL
PRADA,
 Autorité des Marchés financiers (French Securities Regulator)
127
Financial conditions, alternative asset management and political risks: trying to make sense of our times
R
AGHURAM
G. RAJAN,
University of Chicago
137
Hedge funds in emerging markets
W
ILLIAM
A. RYBACK,
 Hong Kong Monetary Authority
143
Fund of hedge funds: origins, role and future
P
ATRICK 
STEVENSON,
 Atlas Capital Limited 
151
Hedge funds: a central bank perspective
A
XEL
A. WEBER,
 Deutsche Bundesbank
161
|B
IBLIOGRAPHY
169
|R
ÉSUMÉS
183
|P
UBLISHEDARTICLES
193
|S
UBSCRIPTIONFORM
197
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