MALONEY: Given recent news reports about hedge funds having made huge bets against the stock price of Bear Stearns during the week leading up to its collapse and now reports that Iceland is investigating whether certain hedge funds may have played a role in beating down its currency, do you believe there is a need for any new regulatory oversight of hedge funds? And, if so, what type of oversight?
BERNANKE: Congresswoman, the concerns that you raise and similar ones are examples, if they were true, of course, of market manipulation, which is already the province of the Securities and Exchange Commission and which I am sure will look into these contentions. So I certainly don't have any objection or any problem with enforcement of securities laws and of investor protection in the context of hedge funds.
It's been remarkable, the hedge funds have been less of a problem than we anticipated in some sense, and we've seen more problem in some other sectors. So far, one of our main concerns had been that hedge funds that failed would create losses for their counterparties, the major financial institutions. Thus far, we have not seen any significant losses taken by a major financial institution because of a hedge fund loss or failure. So in that respect, their behavior has not, so far, created risks for our major financial institutions.
From the Q&A session