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WASHINGTON (AP) - The best way to regulate a world of increasingly complex financial instruments is to pursue broad principles without stifling innovation, Federal Reserve Chairman Ben Bernanke said Tuesday.
Bernanke said that in responding to the challenges of rapidly evolving financial markets, regulators need to keep in mind the economic advantages that hedge funds and investments such as credit derivatives provide by helping to diversify risks.
"We should always keep in view the enormous economic benefits that flow from a healthy and innovative financial sector," he said in remarks prepared for a financial markets conference in Sea Island, Ga.
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