Should hedge funds be regulated?

The rapid growth of the hedge fund industry has attracted increasing attention from government regulators. In the United States, for example, the Securities and Exchange Commission(SEC) voted in October 2004 to require many hedge funds to officially register with the Commission beginning in 2006. Actions such as this have led to a widening debate over whether(or to what extent) government should play a role in the development of the hedge fund industry. To address this issue, The Program on Alternative Investments at Columbia Business School's Center on Japanese Economy and Business sponsored a symposium entitled "Should Hedge Funds Be Regulated?" which was held at New York's University Club in November 2004. U.S. SEC Commissioner Harvey Goldschmid, currently on leave from Columbia Law School, delivered the keynote speech, arguing in favor of the Commission's October decision. Following Commissioner Goldschmid's address, Program Director Mark Mason moderated a panel of leading experts from the business, government, and academic communities who debated the pros and cons of government involvement in the industry. These panelists included Franklin Edwards, Arthur F. Burns Professor of Free and Competitive Enterprise at Columbia Business School; John Gaine, President of the Managed Funds Association, a leading hedge fund industry group; Sudhir Krishnamurthi, Managing Director of Rock Creek Capital, a Washington, D.C.-based fund of hedge funds; and Nobuyuki Kinoshita, Director at the Financial Services Agency of Japan.This report covers the keynote address by Commissioner Goldschmid, together with the remarks of the expert panelists and selected exchanges with the audience. Columbia Business School Dean Glenn Hubbard and Center on Japanese Economy and Business Director Hugh Patrick delivered opening remarks, which are also reproduced in this report

Modern Industrial Economics and Competition Policy: Open Problems and Possible Limits

Naturally, competition policy is based on competition economics made applicable in terms of law and its enforcement. Within the different branches of competition economics, modern industrial economics, or more precisely gametheoretic oligopoly theory, has become the dominating paradigm both in the U.S. (since the 1990s Post-Chicago movement) and in the EU (so-called more economic approach in the 2000s). This contribution reviews the state of the art in antitrust-oriented modern industrial economics and, in particular, critically discusses open questions and possible limits of basing antitrust on modern industrial economics. In doing so, it provides some hints how to escape current enforcement problems in industrial economics-based competition policy on both sides of the Atlantic. In particular, the paper advocates a change of the way modern industrial economics is used in competition policy: instead of more and more case-by-cases analyses, the insights from modern industrial economics should be used to design better competition rules