G8 aim to reduce hedge fund risk

15 December 2006

The G8 under Germany's leadership will aim to reduce the risk hedge funds could pose to economies.

Germany's deputy finance minister Thomas Mirow has called on the major industrialized nations to cooperate in trying to make hedge funds more transparent.

He told reporters: "All over the world, people who are in charge of the stability of the international financial system are dealing with the problem.

"What we would like to know is; are there systemic risks, yes or no, and if so, what could we do to deal with it in a reasonable manner."

He recognized that greater transparency could hit the business models for hedge funds and explained that he would not necessarily be pushing for a regulatory solution.

Meanwhile in the US, the Securities and Exchange Commission is set to vote on whether to raise hedge fund investor limits from £1 million to £2.5 million, which could exclude many from the market.

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