FSA says hedge fund risk is low

HEDGE funds pose little threat to the stability of the financial system, according to a report released yesterday by the Financial Services Authority (FSA).

The survey of funds controlling more than $380bn (£241bn), conducted over March and April, found that they have “a strong ability to manage the liquidity of their assets and liabilities”.

The FSA found that, on average, major funds’ leverage was no higher than in 2010, and that there was “limited” systemic risk.