Germany Says Subprime Fallout Boosts Hedge Fund Code

Sep 4 2007 | 11:01am ET

Vindication is always sweet, especially when it bolsters a flagging flagship cause. Just ask German Finance Minister Peer Steinbrück: Months after his quixotic quest for an international code of conduct for hedge funds seemed to have finally run aground, its fortunes have been revived by the U.S. subprime mortgage debacle and its effect on hedge funds.

And in a pair of speeches in Berlin and Frankfurt today, he took something of a pre-victory lap.

The German plan for greater hedge fund oversight, which has also been championed Steinbrück’s boss, German Chancellor Angela Merkel, “has been vindicated at a speed I couldn’t have imagined” when it was proposed, he said in the Berlin speech. Later in the day in Frankfurt, he told a banking conference that the push to improve “sound practices” is “going in the right direction.” He even expressed confidence that some sort of agreement might be reached at the next G7 meeting, set for October in Washington.

“In light of the current crisis, I could imagine that the hesitant behavior by the U.S. and Great Britain will change before our next meeting,” he said in Frankfurt. Up until now, Steinbrück, Merkel and their deputies had made a conscious effort to downplay expectations in advance of ministerial meetings.

Still, he sought to play down talk of an imminent meltdown, telling reporters after the Frankfurt speech, “We face a very serious, critical situation, but there’s also no need to dramatize it.” Earlier in the day in Berlin, he sounded another familiar note.

“I want to avoid and remove a misunderstanding that has always dominated this debate,” Steinbrück said. “This misunderstanding manifests itself in the word ‘regulation’; nobody in the federal government” expects “that these markets can be regulated.”


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.