According to the latest survey done on the topic of hedge funds which was concducted by the Financial Services Authority that is FSA, they have to say that these products pose a very little risk to the financial system in the industry as well as economy.

The results of the survey done by FSA in the month of April in relation to the funds controlling assets whose worth was about 380 billion dollars that sums up to 242 billion pounds had found out that they only posed just a “limited” risk to financial stability inspite of the fact of their use of borrowed money in order to enhance their returns.
As per the report, “Funds continue to report a strong ability to manage the liquidity of their assets and liabilities in aggregate.”
The FSA had given a warning that the results of its survey were very much based on the self-assessments done by the individual managers as well as it was a difficult thing for the regulators to gauge exactly on how funds will be getting affected in the event of a new market downturn if and when it comes up.
The report had to add that, “ the risks to hedge funds remain from a sudden withdrawal of funding, resulting in forced asset sales. This is of particular concern if funds have significant footprints.”
The amount of reduction in the risk that was posed by hedge funds in a partly manner reflects the moves done by their counter-parties, that on a larger basis has the prime brooking desks of quite a few banks that offer short-term loans to the managers, in order to tighten-up their criteria on lending money as well as to increase the amount of margin which they must provide to place trades along with them.
Before the collapse of Lehman Brothers in the month of September of the year 2008, the hedge funds were required on an average to post collateral valued at a figure of 29 per cent of the value of the position that they were taking. Nevertheless, following the collapse of the Lehman , the banks became all the more risk averse and the funds are now required in order to put collateral worth about 37 per cent of the value of their trade. Apply with pay weekly loans @ http://www.payweeklyloans.org.uk/ and get quick fund your immediate aids.
In order reduce risk further, these funds also frequently post excess collateral with their own banks, where they provide the lenders with more assets over which they can put a claim in the event a firm were to get into any kind of trouble.