Hedge funds are saying that The Bank Of England’s assault on them ignores the current realities and reflects on the doings of the bad old days of the near-collapse of Long Term Capital Management. Last week, the BoE stated in its biannual Financial Stability Report that it was increasingly concerned about overleveraging and trading in complex and risky instruments. Hedgies shot back immediately. “The days of LTCM, where there was very little collateral used in investments, are over,” said one unidentified HF manager in London in an interview with The Telegraph, noting that these days hedge funds rarely trade without a hedge position to cut risk. Chris Woods of State Street Global Advisors added that today many hedge fund managers recognize “the need for substantial investment in technology and controls that are required in order to trade in credit derivatives” – a move prompted by the increasing inflows from institutional investors. A spokesman for the Alternative Investment Management Association noted, “The whole essence of hedge funds is about managing risk. Hedge fund managers recognize this and are probably better risk managers than their traditional peers.”