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Finance
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2000-03-26 16:19:00-05
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Hedge Fund Disclosure backed at Singapore Meeting
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Financial Stability Forum composed of financial ministers from seven leading countries, urges oversight of funds which caused near panic in 1998
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Financial ministers of the seven leading industrialized nations, meeting in Singapore this weekend, called for disclosure of the size of hedge funds and the leverage, for funds over US$1 billion. The ministers did not recommend direct regulation of the funds but hoped that by more extensive reporting, the funds would, in essence, regulate themselves. The ministers did keep direct regulations as a possibility. Hedge funds are strategies used to offset business or investment risk. A perfect hedge strategy, for example, would be one that eliminated any loss or gain. The Financial Stability Forum is composed of the afore mentioned seven nations plus representatives of international finance organizations, including the International Monetary Fund. The forum also recommended a 'code of good practice' for hedge funds and other highly leveraged institutions operating in nations with small or medium-sized markets. As such firms have in the past, been accused of destabilizing the market. Howard Davis, chairman of the United Kingdom Financial Authority, heaped praise on proposed legislation in the United States Congress, which would require disclosure on the part of hedge funds and other highly leveraged institutions and called for 'complimentary provisions elsewhere (in the world).'
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