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Bloomberg – The Group of 20 leaders will agree on new rules to rein in hedge funds and may more than double the resources of the International Monetary Fund, U.K. Chancellor of the Exchequer Alistair Darling said.
“There is a recognition that some hedge funds are systemically important,” Darling told Bloomberg Television in an interview today in London. “There will be an agreement there. Where you’ve got something that’s systemically important like a hedge fund, you need to know what’s going on there.”
Prime Minister Gordon Brown has struggled to allay the concerns of German Chancellor Angela Merkel and French President Nicolas Sarkozy as they press for a crackdown on traders and lenders. Darling’s comments suggest consensus is now emerging among G-20 leaders in the London talks on measures to combat the financial crisis.
New York (HedgeCo.Net) – Hedge fund regulation was the hot topic at this past weekend’s meeting of European Union leaders, when German Chancellor Angela Merkel hosted a summit in Berlin discussing ways to curtail the financial crisis.
Merkel joined leaders from The Netherlands, Spain, France, Italy, England, the Czech Republic and Luxembourg to agree on a unified EU stance prior to London’s G20 Summit in April, where all the world’s leaders will come together to discuss the financial crisis.
"We have today underscored our conviction that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile,” said Merkel. “This is especially true for those private pools of capital, including hedge funds, that may present a systemic risk," she said, although the details of how hedge funds should be regulated still need to be worked out.
English Prime Minister Gordon Brown has also expressed his belief that there should be tighter regulation, despite the fact that London is Europe’s premier center for hedge funds.
"Together we will support oversight of under-regulated sectors and I also support proper disclosure and transparency of hedge funds," Brown said earlier this month.
French President Nicolas Sarkozy agreed, saying, “We want regulation of hedge funds, and we’re not going to put up any longer with the bonus reward system of traders and bankers.”
The EU leaders are scheduled to meet again this Sunday.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Bloomberg – A group of hedge funds offered to increase disclosure to head off demands from politicians on at least two continents for more transparency.
“We know which way the wind is blowing,” said Andrew Baker, chief executive of London-based Alternative Investment Management Association, the industry’s largest lobby group. “We see a lot of this as inevitable and we’d like to put ourselves in a position to say, ‘You don’t have to drag this out of us.’”
European leaders meeting in Berlin on Feb. 22 said they want to subject the $1.4 trillion industry to more regulation because hedge funds “may present a systemic risk” to world economies, according to German Chancellor Angela Merkel.
Independent – European leaders backed major reform of hedge funds yesterday as part of structural changes to help the world’s financial institutions emerge stronger from the global economic crisis.
Short-selling by the secretive hedge fund industry — selling borrowed stock in the anticipation that the prices will fall — was blamed by some politicians for exacerbating the banking crisis and economic meltdown.
A copy of the summary from the summit hosted by German Chancellor Angela Merkel in Berlin said banks should bring in reforms to ensure they build up a buffer of resources in good times and called for sanctions against tax havens.
