Britain Is Encouraged by Germany to Push for Hedge Fund Transparency

HedgeCo.Net (New York) – Germany has had a voluntary code of conduct for hedge fund regulation but is now preparing for greater scrutiny with its V7 government approach andis encouraging Britain to do the same. So far Britain’s light-touch approach to regulation has made London a thriving hedge fund center, 70% of Europe’s hedge funds are based in London and around 90%do their banking there.

However, a government source said Britain would back a new study into the risks posed by hedge funds and their growing clout in global markets. The study is likely to be conducted by the FinancialStability Forum, a committee of national regulators.

The source was was quoted in Forbes as saying, “Britain’s position is that hedge funds play a positive role by making financial markets more liquid and competitive, but we are never complacent aboutrisk,……We are happy to cooperate with international efforts aimed at improving our understanding of risk but will resist any blanket approach.”

Germany has put greater scrutiny of the roughly $1.5 trillion hedge fund industry at the top of its agenda for this weekend’s meeting of Group of Seven finance ministers in the industrial city of Essen.

The United States has been more sceptical of the need for a regulatory clampdown.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: [email protected]