Blaming the Fed for Carlyle's Collapse

Some pundits suggest that the Federal Reserve's move to prop up the banking system prompted creditors to play hardball with Carlyle Capital
Managing Director of the Carlyle Group David Rubenstein HECTOR MATA/AFP/Getty Images

Could the Federal Reserve's efforts to prop up the banking system have the unintended consequence of pushing some debt-burdened hedge funds out of business? The question arose this week after Carlyle Capital—a fund with $22 billion in assets at its peak—announced that creditors were seizing its collateral because it couldn't meet margin calls, or requests for additional collateral.

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