|  |
Advertisement
 |
|
| | |
| | Top officials from the Group of Seven pledged Friday to "monitor" speculative hedge funds and said strengthening discipline over such instruments would promote global financial stability. But G7 ministers and central bankers, in a statement issued after a meeting here, dropped a reference to the need for "vigilance" with regard to hedge funds that they had included in their previous communique, issued in February. While hedge funds have "contributed significantly" to the smooth functioning of global finance, the ministers said, there remained a need "to monitor the implications of these developments." Hedge funds are unregulated, privately managed investment instruments that rely on aggressive -- and risky -- financial strategies. "Market-led and official initiatives ... intended to strengthen market discipline, risk management, market infrastructure, information and valuation practices are essential contributions to global financial stability," the statement said. Germany had been pressing for tighter controls over the trillion-dollar hedge fund industry, warning that if one or two such funds collapse there could be damaging repercussions for the world economy. But German zeal for regulation has been resisted by the United States and Britain and has also failed to win the backing of the International Monetary Fund. The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States. |
