CANADA - The Office of the Superintendent of Financial Institutions (OSFI) said it had "no concerns" with the participation of Canadian financial institutions in hedge funds.
Despite the vote of confidence, OSFI acting superintendent Julie Dickson stressed the organisation would continue to monitor hedge fund activity going forward.
Speaking to the senate standing committee on banking, trade and commerce yesterday, Dickson said OSFI's review of the major banks' exposure to hedge funds indicated it was relatively small and that risk management practices were adequate.
“Canadian banks are found to be taking a cautious approach to hedge funds,” said Dickson.
“While OSFI does not currently have any concerns with the participation of Canadian financial institutions in hedge funds, activity in this area will continue to be evaluated as part of OSFI's ongoing supervisory process.”
Dickson added that OSFI was also in contact with its international counterparts on a regular basis to discuss hedge funds.
“With respect to hedge funds, we pay particular attention to the work and views of regulators in the United States and United Kingdom, as those countries are where the bulk of hedge fund activity occurs.”
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