On their meeting in Heiligendamm G8 the heads of state discussed the recent developments in global financial markets and release a decleration on global growth and stability stating that “given the strong growth of the hedge fund industry and the increasing complexity of the instruments they trade, we reaffirm the need to be vigilant.”
The global hedge fund industry should review and enhance existing sound practices benchmarks for hedge fund managers; in particular in the areas of risk management, valuations and disclosure to investors and counterparties in the light of expectations for improved practices set out by the official and private sectors.
Counterparties and investors should act to strengthen the effectiveness of market discipline, including, by obtaining accurate and timely portfolio valuation and risk information. Supervisors should act so that core intermediaries continue to strengthen their counterparty risk management practices. In the exercise of their supervision of hedge funds counterparties, relevant authorities should monitor developments and cooperate among themselves.
The G8 wants to minimize systemic risks by increasing transparency and market discipline on the part of all parties involved. Heads of state welcomed the Financial Stability Forum’s work, support its recommendations and look forward to its report to finance ministers as from October this year.
Chairs summary
Summit Declaration on Growth and Responsibility in the World Economy
© G8
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