Regulators Should Act to Limit Hedge Fund Leverage, FSB says

National regulators should consider forcing hedge funds and other financial firms to have more skin in the game to back dealings in core markets like government bonds, the Financial Stability Board said on Wednesday, as it stopped short of recommending global leverage limits for institutions beyond traditional banks.

“My guess would be that we, the FSB, would not issue a recommendation with a specific limit for any type of a non bank, but that we would rely on the national standard setters and the authorities,” John Schindler, Secretary General of the FSB said, as the watchdog began a consultation ...