Hedge funds should open their books to regulator says former Citigroup chief executive officer Sandy Weill.

In an interview in Der Spiegel, Weill says hedge funds should report to one regulator who oversees all the other financial institutions. The reason, he says, is that the system has deep systemic risks.

"There is a lot of leverage in the business which means they don't just use the money they have but borrow money, so they use multiples of their own capital. The risk is what the size of the positions are and what happens in those positions if all of a sudden something outside impacts on the market to change it or if the liquidity begins to dry out. That changes the ability to get in and out of markets ... How much are they investing into what? How much do they borrow? It's a problem not to know these things."

Weill's comments reflect the growing concerns about these largely unregulated pools of capital and the risks they present for investors and markets, risks of bringing down entire financial systems with borrowed money. Some of these concerns were being raised when Amaranth imploded last year.

I discuss them here.