Yesterday, Treasury Secretary Henry Paulson outlined a plan that would vest his office with the power to manage hedge funds in the event of a funds collapse. Secretary Paulson said that he wanted, additional powers to manage the resolution, or wind-down, of large non-depository financial institutions, such as larger hedge funds, so as to limit the impact of a failure on the broader financial system. This increased regulatory control would help insulate the economy in the event of a massive hedge fund depression. As Secretary Paulson contends, Over the last several weeks, the need to move more quickly toward an optimal regulatory structure that establishes a prudential financial regulatory system, focused on promoting long-term market stability has become all the more apparent.