Was it just us, or earlier this week during Ben Bernanke’s testimony in front of the US Senate, did Senator Chuck Schumer have a real bee in his bonnet about hedge fund leverage?…

Schumer: It’s clear that one of the key problems over the past few years has been excessive risk taken by financial institutions.  Some of that was by big depository institutions – some was by smaller hedge funds and private equity funds.  Do you agree with me that we need to more greater supervise smaller players such as hedge funds and private equity funds…And do you agree more broadly we need to put in place stronger curbs on risk taking – in particular on the amount of leverage that financial institutions – whether large or small – use in their investing strategies?

Bernanke: Senator, I think we need a more macro-prudential oversight…yada yada yada…

Schumer: But…Isn’t it true that smaller institutions can cause systemic risk…?

Bernanke: Well they can.  But that’s more likely if either there is large number of them in the same boat…or (where) a larger more complex institution is more likely to (inaudible).

Schumer: But you don’t rule out some kind of regulation for the smaller (institutions).

Bernanke: Well we already have regulation…yada yada yada…

Schumer: But that doesn’t answer my question.  I asked you about the small ones and you gave me an answer about the big ones. More…