Berlin – Finance Minister Peer Steinbrück of Germany said that the U.S. policy of providing guidelines to hedge funds was “not enough” as he sought European support to subject the funds to a code of conduct.
Germany and the United States are at odds over how to toughen oversight of the $1.5 trillion hedge fund industry, with Steinbrück pushing a formal code while Treasury Secretary Henry Paulson Jr. of the United States supports a set of principles that informs investors and leaves them to monitor risk.
“We need to see what kinds of benchmarks are developed to ensure these practices are implemented,” Steinbrück told reporters Saturday after a meeting of finance ministers and central bankers from the 27-country European Union in Berlin.
The EU is planning to form a joint proposal when its finance ministers next meet in Brussels on May 8 before those from the Group of 8 governments convene in Potsdam, Germany, a week later. Jean-Claude Juncker, the prime minister and finance minister of Luxembourg, said that there was a “good chance” that the German initiative would be endorsed.