I personally had many a dealing with hedge funds long before my time at the Bundesbank. But the significance that they have now achieved for financial markets has reached new heights owing to the capital constantly accruing to these funds and increasingly, too, from regulated institutional investors such as insurance companies and pension funds.
Turning to the necessary policy response at the European level, the reinforcement of the fiscal rules and the introduction of a new surveillance framework for macroeconomic imbalances are necessary elements in strengthening overall economic governance in the euro area.