Home | Databases | WorldLII | Search | Feedback Edited Legal Collections Data

"Introduction" [2012] ELECD 235; in Athanassiou, Phoebus (ed), "Research Handbook on Hedge Funds, Private Equity and Alternative Investments" (Edward Elgar Publishing, 2012)

Book Title: Research Handbook on Hedge Funds, Private Equity and Alternative Investments

Editor(s): Athanassiou, Phoebus

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849802789

Section Title: Introduction

Number of pages: 10

Extract:

Introduction


This book is published at a time of unprecedented crisis. A few words
on its origins, their link to the activities of alternative investment funds
and the recent surge to regulate them are deemed appropriate, by way of
introduction.
The progressive deregulation of the European and US banking and
financial systems, in conjunction with the galloping pace of financial glo-
balization, have been amongst the salient characteristics of the last two
decades of the history of finance. One of the most enduring legacies of the
deregulation era, which was to see a flurry of promising financial innova-
tion, has been the greater susceptibility of the European and US econo-
mies to asset and market bubbles, corporate scandals and failures and,
more recently, to generalized financial sector and, in some cases, sovereign
crises. As for globalization, one of its most lasting legacies has been the
increasing vulnerability of national economies to financial meltdowns in
the face of large, `imported' shocks.
While globalization is, to some extent at least, something of a natural
phenomenon, with technological innovation greatly facilitating the flow of
capital from one corner of the world to the other, exposing market players
to cross-border risks, deregulation is more a matter of choice. The policy
makers' conscious decision to substitute the `heavy hand of government'
with the wisdom of the markets and the promise of financial innovation
to contribute to the better pricing and spreading of risk have seen the US
Congress repeal the Depression-era Glass-Steagall ...