The House Banking Committee has scheduled a hearing Thursday on the risks hedge funds pose to the global economic system.

Witnesses include Federal Reserve Board Chairman Alan Greenspan and New York Federal Reserve Bank President William J. McDonough, a committee spokesman said. Securities and futures regulators have been invited, and additional banking regulators may be added to the panel.

The hearing was prompted by news of the rescue of Long-Term Capital Management LP by a consortium of 14 banks and brokerages. The hedge fund nearly collapsed last week from losses on more than $90 billion invested in global financial markets.

"Questions exist as to whether appropriate national and international supervision exists and whether funds designed to hedge risk for individual participants create risk to the system as a whole," Committee Chairman Jim Leach said in a prepared statement.

Rep. Thomas E. Petri, R-Wisc., urged Rep. Leach in a letter Monday to focus on whether banks had lent too much money to Long-Term Capital. "It appears that this so-called hedge fund would not have threatened the stability of the world's financial system had (its) lenders not supplied it with as much credit as they did," he wrote.

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