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Merkel drafting hedge fund code of conduct

Date: Wednesday, December 19, 2007
Author: Forbes

BERLIN (Thomson Financial) - German Chancellor Angela Merkel is working with French and British counterparts to create a set of non-binding rules for hedge fund operators, a press report said today.

'We are working on a self-regulation project for the hedge fund sector. I will present a set of proposals with British Prime Minister Gordon Brown and French President Nicolas Sarkozy before the spring,' Merkel told Capital magazine in an interview due to be published on Thursday.

'There is no doubt that we need to find a new balance on the financial markets between liberty and regulation,' she added.

Merkel has repeatedly called for a code of conduct to govern hedge funds in the wake of widespread turmoil on credit markets caused by a crisis in speculative investments in risky US home loans.

But the call has found little favour with Berlin's partners in the Group of Eight most industrialised nations, notably in Anglo-Saxon countries where a large number of the funds are based.