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Article: 'Reckless' loans spark retreat from hedge funds BANKING_London and Wall Street pull back from scandal-hit sector that has already been advanced over $500bn
- Article from:
- The Independent on Sunday (London, England)
- Article date:
- October 16, 2005
- Author:
CopyrightCopyright 2005 The Independent on Sunday. Provided by ProQuest LLC. (Hide copyright information)
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Banks in the City and on Wall Street are slashing the amount they
lend to hedge funds after it emerged that more than $500bn (pounds
280m) has been advanced by just a handful of banks.
The number and size of hedge funds has ballooned in recent years
to create an industry managing over $1,000bn of clients' money. It is
believed that as much again has been borrowed by funds keen to
'leverage' their investments.
Concern over the level of lending has come from the US Securities
and Exchange Commission and the Financial Services Authority in
London. This has led many banks to review lending criteria, described
by one bank insider as 'reckless' and 'counter-productive'.
This review was started ...