MSN MoneyCentral – The US Treasury is to convene its first formal meetings with hedge funds and investment banks in coming months in a sign that it wants to learn more about the possible risks oflenders’ exposure to the industry.
The move is a sign of a belief at Treasury that efforts to understand the impact of hedge funds on the economy should focus on assessing counterparty risks. Much of the focus of US lawmakers in recent months has been on how to regulate the industry.
Last month the Securities and Exchange Commission was dealt a setback to its efforts to oversee hedge funds when a US court overturned a rule that had required fund advisers to register with SEC.
Emil Henry, Treasury’s assistant secretary for financial institutions, said his department held meetings two weeks ago with officials at the SEC and other regulators to lay the groundwork for up to four meetings with the private sector between now and the end of the year.
He told the Financial Times: “We’d like to understand in this process how much information is coming through counterparties, how diligent are the counterparties being and how clear or opaque is the information that’s coming up indirectly through the counterparties.”
