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Bernanke Backs Fund Regulation System
There are more than 9,000 hedge funds with assets that now top $1 trillion in the United States. They traditionally have catered to the rich but smaller investors can be exposed through holdings of pension funds.
The funds, which operate with minimal government supervision, can invest in anything from commodities to real estate. Some hedge funds buy entire companies while others buy and sell stocks like day traders but with billions of dollars at stake.
  Federal Reserve chairman Ben Bernanke, gestures as he answers students' questions at New York University's law school in New York, Wednesday, April 11, 2007. The current market-based system is the best way to regulate the trillion-dollar hedge fund industry although improvements can be made, Federal Reserve Chairman Ben Bernanke said Wednesday. (AP Photo/Kathy Willens) (Kathy Willens - AP) Partnership
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• Representatives of leading hedge funds were scheduled to meet this Sunday with finance officials from the Group of Seven wealthy industrial countries in Washington to discuss whether there is a need to improve global monitoring of the funds.
The discussions, which will take place around the spring meetings of the International Monetary Fund and World Bank, are part of an effort being pushed by Germany to increase hedge fund transparency. U.S. officials have expressed reluctance about the German proposal.
"The meeting is intended to be a discussion on recent developments and current issues regarding hedge funds," said Treasury spokeswoman Jennifer Zuccarelli. "It is an opportunity for G-7 officials to learn directly from representatives of the hedge fund industry."
German Chancellor Angela Merkel wants to include improved hedge fund regulation on the agenda for this year's summit of G-8 countries taking place in Heiligendamm, Germany, in June. The G-8 includes the G-7 countries of the United States, Japan, Germany, France, Britain, Italy and Canada as well as Russia.
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AP Business Writer Tim Paradis in New York contributed to this report.
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