The impact of hedge funds on financial markets

Tecnological Developments in the last century have caused many novelties to take form under no control and auditing. This situation is also seen in financial markets. Many new financial instruments have been formed without no control or auditing mechnisms. Hedge funds, which is also the topic of this work, is one of these financial instruments. These developments in financial sector have been made in orderto have a number of benefits. The increase in the number of financial instruments have enabled more investors to invest in financial markets. People from low income levels and without interest to financial sector also started to invest in financial market. As the demand on hedge funds started to increase, its place in financial sector have also been started to be questioned. In this study, the place of hedge funds in financial system have been tried to be figure out. The conclucion of this study is that hedge funds have positive effects on emerging markets because they increase the activation of the financial markets in these countries. Moreover, the increase in the number of financial instrument as well as hedge funds have negative effects on the global economic system because it increases the economical breakability.