Immoveable Object: Germans, Americans Split On Hedge Funds

Apr 16 2007 | 8:57am ET

The G7 is no closer to a common hedge fund policy after Friday’s talks in Washington, with the U.S. making it clear that it is not backing away from its opposition to “heavy-handed” moves.

Indeed, the summit of G7 finance ministers and central bank chiefs put the differences between the U.S. and U.K. on the one hand, and the German-led euro bloc on the other, in perhaps its sharpest relief.

“There’s a wide difference of views on what to do,” Bank of Italy governor Mario Draghi said after the talks.

But the Germans made clear they have not abandoned hope for a resolution. Bundesbank President Axel Weber told an International Monetary Fund panel yesterday, “We should move forward in developing a strong case for a benchmark of best practices” as a rubric for an eventually code of conduct. That earned a rebuke from U.S. Treasury Undersecretary Robert Steel, who said Weber’s words “sounds like a policeman and that’s not what I’m into.”

Friday’s talks were designed to prepare for June’s G8 summit in Heiligendamm, Germany, and included the first tete-a-tete with hedge fund industry represents, about 20 of whom met with the G7 officials. German Deputy Finance Minister Thomas Mirow said that, despite the setback, he was “optimistic that we can reach joint conclusions in the course of this debate.” He added that Germany and its allies were not seeking regulation, “neither light nor heavy,” but wanted to increase disclosure requirements and improve transparency. But even here, he acknowledged, there was no easy common ground.

“There are difference of opinion as to who should disclose what and how we can get companies to disclose information,” he said.

In the end, however, there was accord: The conferees agreed to “continue to monitor” the situation.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...