EU finance ministers spoke out in favour of an "indirect supervision" approach to hedge funds and supported a form of a voluntary code of conduct at a meeting on 8 May.
German Finance Minister Peer Steinbrück said after the meeting: "Concerning a voluntary, self-implemented code of conduct for hedge funds, I do not think any one suggests that this is not a desirable objective, although one might have to argue about certain individual points."
This light stance on regulation foresees a "close supervisory monitoring of credit institutions' exposure to hedge funds and progress in upgrading their internal risk management systems", Steinbrück said.
Member states underlined the importance of the "significant" contributions that hedge funds make to the efficiency of the financial system, but at the same time recognise the "potential systemic and operational risks" that they represent and called on creditors and investors to remain vigilant.
At the same time, finance ministers adopted conclusions on the Commission's White Paper on Investment Funds and agreed to make amendments to the EU single market framework for investment funds – the UCITS Directive.
