Notice of RetractionImpacts of Hedge Funds on American Banking Industry

Hedge funds have increased dramatically last decade to be the main force in the global financial market. Through constructing a weighted portfolio of 1171 American listed commercial banks which can be used as the proxy variable of American banking industry, the authors empirically examine the relationship between hedge funds and American banking sector using monthly return data from 1994 to 2008. The results indicate that the return level of American banking sector is tightly related with hedge funds suggesting that there is a symbiotic relationship between the two which may result in a new source of systemic risk These findings are helpful to understand the role of hedge funds in the financial storm happened in 2008.