Hedge fund regulation on the table

Stephen Beard Feb 9, 2007
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Hedge fund regulation on the table

Stephen Beard Feb 9, 2007
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TEXT OF INTERVIEW

MARK AUSTIN THOMAS: The G-7 Finance Ministers begin their two-day meeting today in Germany. One item on the agenda is a discussion of hedge funds and the need for regulation. I asked Marketplace European correspondent Stephen Beard how this issue was brought before the group.

STEPHEN BEARD: The Germans have put this on the agenda. The Germans do not like hedge funds, but the Germans do quite seriously fear that a major hedge fund could collapse and that could precipitate a global financial collapse.

THOMAS: What’s been the reaction from the U.K. and the U.S. on this?

BEARD: Well this does reveal a cultural divide. The Germans want to see hedge fund become a lot more transparent and to be regulated whereas the Americans and their allies the Brits would prefer a sort of market solution. They would prefer investors to bring more pressure to bear on hedge funds to make them more prudent.

THOMAS: Are we likely to see any regulation come out of this G-7 meeting?

BEARD: I think it is most unlikely. 80 percent of the hedge funds in Europe are based here in the U.K. and the Brits and the Americans I think are extremely unlikely to agree to regulation, which could drive a lot of that business offshoring.

THOMAS: Thanks Stephen.

BEARD: OK Mark.

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