“ I am pleased that in the wake of the consultations of the Informal ECOFIN in Berlin a few weeks ago we have today succeeded in adopting unanimous conclusions of the Council on hedge funds. They provide a good foundation for further deliberations on this important topic both at European and at G 7 / G 8 level. At the coming G 8 finance ministers’ meeting in Potsdam this unified European position will lend support to Germany's desire to make more progress with the process for more transparency on the hedge fund market.”
In its conclusions the Council expressly recognises the positive contributions made by hedge funds to the efficiency of the financial markets. At the same time, however, the Council also stresses that there are potential systematic and operational risks which can be connected with the activities of hedge funds. The Council reminds us of the need for lenders, investors and supervisory authorities to remain vigilant and take care to make an adequate examination of the potential risks involved with hedge funds. In this connection lenders and investors should also consider whether the activities of hedge funds are sufficiently transparent at present. As part of their indirect supervision, the relevant supervisory issues should monitor developments and work together. In order that the impact of the activities of hedge funds on financial stability may be effectively scrutinised, the Council calls upon the relevant institutions to develop and implement a corresponding analytical and empirical approach. The Council therefore requests the Commission to take account of all the pertinent developments in the regulatory and market environment when reviewing the advantages and disadvantages of an internal market framework for non-harmonised funds directed at private customers, to which hedge funds could also belong, and to produce a report on this.
The full text of the conclusions of the ECOFIN Council may be found at www.bundesfinanzministerium.de.
