@article {Brown8, author = {Gregory W. Brown and Jeremiah Green and John R.M. Hand}, title = {Are Hedge Funds Systemically Important?}, volume = {20}, number = {2}, pages = {8--25}, year = {2012}, doi = {10.3905/jod.2012.20.2.008}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Like derivatives, hedge funds are often blamed for causing or at least contributing to economic and financial disruptions, regardless of whether any factual evidence supports that conclusion. The entire financial system was affected in Fall 2008, which then raised the general question of whether hedge funds are a source of systemic risk, and more specifically, whether they engaged in predatory trading that caused or exacerbated the market crash. For example, fear of {\textquotedblleft}bear raids,{\textquotedblright} presumably by large and aggressive players including hedge funds, led to a ban on short selling for over 1,000 financial stocks during that period. Hedge funds might cause systemic risk intentionally, to make profits while inflicting losses on the system, such as in a bear raid. Or, their impact could be unintentional, if hedge funds experienced forced liquidations of leveraged positions to meet customer redemptions.TOPICS: Mutual fund performance, risk management, financial crises and financial market history}, issn = {1074-1240}, URL = {https://jod.pm-research.com/content/20/2/8}, eprint = {https://jod.pm-research.com/content/20/2/8.full.pdf}, journal = {The Journal of Derivatives} }