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European leaders of the Group of 20 took the first step in market regulation. The leaders said that all financial products, including hedge funds must be regulated.
The leaders also said that the resources of the International Monetary Fund must be doubled to $500 billion. British Prime Minister, Gordon Brown, said that the increased funds should be used to help Eastern European economies.
Members who were polled agreed that "all financial markets, products and participants including hedge funds and other private pools of capital which may pose systemic risk must be subjected to appropriate oversight and regulation."
On a different topic, members agreed that "we will -- refrain from any protectionist measures" and make every effort to maintain free trade.
The effects of these policies are already crossing the pond and will have direct implications for U.S. financial institutions. We could guess that Congress will soon take the lead from Europe and enact strict measures of financial regulation on all types of markets and participants.
Its ironic that financial institutions that had a field day under deregulation are now facing a straitjacket of new and intense regulations. Funny how the wild speculation came back to bite them.
Do you believe that our markets should be regulated more strictly?
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Reader Comments (Page 1 of 1)
2-22-2009 @ 6:01PM
ae86takumi said...
Finally!!! When is this to be done in the US? We cannot trust this generation in the Financial area. We need to regulate them until a new batch comes around.
2-22-2009 @ 11:46PM
Gwen Harper said...
I am not sure what to think about this. People have a right to make hedge funds and other people have a right to buy into them, knowing the dangers. I would like to know exactly what is the controversy here.