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Cayman Islands Spars With Sachs Over Hedge Fund Directorships

The head of the Cayman Islands financial services industry trade group rejected charges from economist Jeffrey Sachs that the Caribbean nation’s oversight of hedge funds and banks is a “mortal threat” to the global economy.

Sachs, in separate letters to the Financial Times the past two weeks, said some residents of the island nation sit on hundreds of fund boards, limiting their ability to provide oversight. He also said the Cayman banking system has $1.4 trillion in liabilities and assets, citing data from the Bank for International Settlements. The system is a “house of cards” for the global financial system, he said.