Germany's Merkel pushes for G8 hedge fund talks

Merkel has proposed a plan for roundtable discussions between the world’s 20 biggest hedge funds and politicians from the world's eight-largest economies with the principal aim of preventing economic crises through the confidential exchange of information.

Merkel’s plan will be discussed as part of the agenda at the annual world economic summit of the G8 that will be held in June in Germany, which is president of the group, according to German magazine Capital.

The G8 countries include the US, France, Germany, Japan, the UK, Canada, Russia and Italy.

Merkel is aiming for central banks and other supervisory bodies including national regulators to participate in the debate over information exchange with hedge funds.

Meanwhile, the UK's Financial Services Authority has proposed rule changes that would allow fund of hedge funds managers to market their products to the public. This would put the UK in line with other European countries including Germany, France, Ireland and Spain.

A spokesman for the Alternative Investment Management Association, a trade association for the hedge fund industry, said: "This is a positive step. Retail investors should be given the opportunity to invest in market-leading investment products that can deliver absolute return performance in all markets, so giving a better opportunity for risk diversification."

Merkel’s call for closer links between politicians and hedge funds comes after the hedge fund industry has developed into one of the deepest pools of liquidity in international capital markets, promoting fears over the extent of their influence on the global economy.