MFA Statement on FSOC Comments on Hedge Funds and March 2020 Market Events

 

February 4, 2022

WASHINGTON, D.C. – Managed Funds Association President and CEO Bryan Corbett today issued the following statement in response to the Financial Stability Oversight Council’s statement on hedge funds and the March 2020 financial market dislocation:

“The Federal Reserve, Treasury, and academic literature have all concluded that foreign investors, including foreign central banks, were the primary sellers in the U.S. Treasury market in March 2020, not hedge funds. The evidence further shows that hedge funds did not pose a systemic risk to the financial system at any point.

“FSOC should continue its work to strengthen our markets and not shift focus away from the root causes of the turmoil. MFA looks forward to our constructive work with FSOC and other regulators to pursue policies that enhance market resilience. This includes more detailed transaction data reported to regulators through TRACE and greater central clearing in the U.S. Treasury Market, which would have afforded regulators a more detailed understanding of real-time market events rather than relying upon generalized end-of-month data.”