To regulate or not? A look at Hedge funds

The decision to regulate or not regulate hedge funds is a tough one. On one hand is the view that more regulation is needed since the funds have grown so large and often take large risks. The big fear in this camp that a "blow-up" could lead to major market declines. (Sort of the LTCM scenario).On the other hand is the view that by their very nature hedge funds are difficult to regulate and