The general manager of the Basle-based Bank for International Settlements, Malcolm Knight, has stated that hedge funds do not pose a systemi...

The general manager of the Basle-based Bank for International Settlements, Malcolm Knight, has stated that hedge funds do not pose a systemic risk to the international financial system, but the way in which they are marketed to smaller investors should be more carefully scrutinised.

Although they were the least regulated sector of the financial market, Mr Knight said at a recent conference: "All hedge funds have [is] a trillion dollars in assets and they have a heterogeneous group of investors and they have different strategies. So I don't think they pose a systemic risk to the world's financial system."

"At the same time these are vehicles that are appropriate for investment by the sophisticated investor and it is important that some concern is reflected...to look into the marketing to smaller asset holders," he said.