MSN MoneyCentral – Jean-Claude Trichet, president of the European Central Bank, hinted strongly last night that he would prefer tougher regulation of hedge funds but said any measures would have torepresent “a global solution”.<\/p>\n
The Frankfurt-based ECB has gone further than other global institutions in stressing the risks of hedge funds and expressing concern about herd instincts and the lack of transparency in the sector.<\/p>\n
Financial authorities in general were not “fully satistified” with a regulatory system that relied heavily on supervised banks monitoring the activities of hedge funds, Mr Trichet told the European Parliament.<\/p>\n
There were a variety of options that could be taken to increase the transparency of the industry but he believed that a “world wide consensus” was within reach on what might be feasible.<\/p>\n
Separately, Mr Trichet said falling oil prices could lead to eurozone output and demand growth exceeding the ECB’s expectations, if they prove lasting.<\/p>\n