Watchdog investigates leveraged hedge funds after massive losses

The Danish Financial Supervisory Authority, Finanstilsynet, is keeping a close eye on hedge funds that invest in mortgage bonds and have recently reported large losses. The gearing of the funds is under scrutiny, the FSA says.
Photo: Lars Krabbe/IND
Photo: Lars Krabbe/IND
by jørgen rudbeck, translated by catherine brett

When investment funds use leverage, the risk levels unsurprisngly rise ­ both for that specific fund, but also for the market as a whole, as this practice reinforces fluctuations.

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