IMF rejects calls for greater hedge fund regulations

12 April 2007

Calls for regulation of hedge funds have been dismissed by the International Monetary Fund at the G7 forum.

Lobbying for tighter restrictions on the activities of asset management groups had been headed up by Germany and other countries, which fear that the collapse of a hedge fund could have severe consequences for national economies, because of the amount of money involved.

However, speaking at a press conference, IMF chief economist Simon Johnson said that "sensible, macroeconomic" governmental policy remains the most effective bulwark against economic crises.

He said: "Obviously there are some particular concerns about whether hedge funds are taking extremely large leveraged bets that could have adverse consequences on banks who might be lending to them

"But we don't see anything in this current situation that would merit a heavy-handed, big increase in regulation across the board of any kind."

Both the US and the UK have thus far resisted calls for greater controls.

Mr Johnson is due to meet with 20 representatives from hedge funds to debate ways in which hedge fund activities could be made more transparent.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development