Friday, 25 July 2014
Last updated 17 hours ago
May 18 2007 | 9:37am ET
Jean-Claude Trinchet, the president of the European Central Bank, said in advance of this weekend’s G8 finance ministers meeting that there is an “emerging consensus” in favor of a voluntary code of conduct for hedge funds.
Could have fooled us.
The German crusade to push through some kind of oversight measure during its presidency of the G8 has suffered setback after setback in the past few weeks. It’s primary antagonists, the United States and Britain, have remained firm in their opposition, and have been joined by Japan, which last week said its stance is “close” to that of the Anglo-Saxon powers.
Then Germany dropped mention of the voluntary code from the proposed communiqué to be issued after this Saturday’s meetings. And Peer Steinbrück, the German finance minister and Chancellor Angela Merkel’s point-man on hedge funds, has sought at every opportunity to lower expectations for a speedy breakthrough, saying today “we shouldn’t drive expectations too high” for the G8 summit next month.
Worse still for Steinbrück, his American and British counterparts will only be at Potsdam this weekend part-time or not at all, and his French colleague has been on the job for less than a day.
Still, Steinbrück indicated that he will continue to seek support for Germany’s proposals, buoyed by Trinchet’s support. Indeed, he echoed the ECB president, telling reporters that hedge funds’, if not their governments’, “willingness to accept proposals that could lead to what I call a code of conduct is increasing.”
“Nobody’s thinking about governmental or supranational regulation,” Steinbrück insisted. “What’s motivating us is the indirect approach.”
Trinchet said, in an interview with the Financial Times, “I trust that in a number of areas we can proceed very much through the way of such voluntary codes.”
One country not interested in any voluntary is South Africa, which is reportedly planning strict regulation of its hedge fund industry. Much like the proposed rules in Canada, the South African Reserve Bank and Financial Services Board will by the end of the month promulgate new regulations requiring, among other things, registration and specific classifications with stricter requirements.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…