During times of stress, many hedge funds reduced risk-taking and instead concentrated on capital preservation, either voluntarily, or due to the reduced availability of bank funding and investor withdrawals. The deleveraging in the hedge fund sector has been widespread and rapid as illustrated in Chart 7.
Close cooperation at the European and international levels is indispensable in order to supplement microprudential supervision with a systemic view. The  BIS Review 125/2010  1  establishment of the ESRB is an important step in the right direction. Now the challenge for its members is to make it a success. Thank you very much. 2  BIS Review 125/2010