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Call For Int'l HF Checks No China Bull

China is leading the charge for greater international cooperation in making sure hedge funds don't turn global economics on its ear.

China is leading the charge for greater international cooperation in making sure hedge funds don't turn global economics on its ear. Following meetings with banking regulatory heads from Germany, Hong Kong, Italy, Singapore and Thailand, Liu Mingkang, director of the China Banking Regulatory Commission, stated on the agency's Web site, "Regulators in all countries should strengthen the monitoring of hedge funds and be on alert against any counterparty and liquidity risks they introduce." Liu, noting the surging HF activity especially in Asia, recommended that his fellow bank regulators take it upon themselves to promptly share information they get on hedge funds as a way of preventing market disturbances. His comments echo those of Zhou Xiaochuan, chief of China's central bank, who earlier this month urged governments to strengthen their control over hedge funds. Meanwhile, while Germany was among those who met with Liu, that country is making moves to encourage more hedge fund investment there. According to Dow Jones Newswires, Germany's Finance Ministry is making changes to its Investment Act that would permit pension funds and insurance companies to allocate more assets to HF investment and to lift the requirement that hedge funds appoint deposit banks - as long as "a suitable third party" can evaluate" a fund's assets, Deputy Finance Minister Thomas Mirow said in a speech this week. "It is important that the German hedge fund market continues to develop, even though it is clear that the Anglo-Saxon financial centers will in all likelihood remain dominant in this field," Mirow explained. "Despite this dominance, we should concentrate our efforts into securing an ever-growing slice of the hedge-fund cake."

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