The US backs a German initiative to seek improved hedge fund transparency during Berlin's presidency of the Group of Eight (G8) nations in 2007, German government officials said yesterday.
US treasury secretary Henry Paulson signalled Washington's readiness to discuss the issue next year during talks in Berlin with German chancellor Angela Merkel and finance minister Peer Steinbrueck.
Ms Merkel and Mr Paulson agreed that transparency was an important condition for efficient capital markets, a German government spokesman said after their talks. "Through more transparency, risks to the stability of the financial system should be prevented and investors better protected," the spokesman said, adding that Ms Merkel and Mr Paulson agreed on this goal.
Germany takes over the presidency of the G8 on January 1st.
Hedge funds have become a powerful market force, originally catering to the ultra-rich and institutions, but increasingly drawing clientele from the less well-heeled. Their assets have doubled in the United States to more than $1.3 trillion (€987 billion) over the last five years.
Mr Steinbrueck and Mr Paulson also discussed hedge funds. "Mr Steinbrueck again indicated that we would like to make that an issue during our presidency, and would like to lead this discussion on how hedge fund transparency can perhaps be improved," a finance ministry official said.
