November 03, 2006

Investors Best Suited to Regulate Funds - Snow

-- By Pushpa Sathish, Staff Writer

John Snow’s singing a different tune from that of his successor Henry Paulson. While the present U.S. Treasury Secretary has called for more transparency and liquidity for hedge funds, his predecessor Snow is of the opinion that investors are the best people to regulate hedge funds. The present chairman of the Cerberus Capital Management and former U.S. Treasury Secretary said that the $1.34 trillion industry was too large for the government to monitor effectively. Snow’s statement is a direct contrast to the stance taken by Senate Finance Committee chairman Charles Grassley, who also called for stronger regulation of hedge funds after the fall of Amaranth Advisors. IHT reports:

“The real policing of these pools of capital are the investors,” Snow said Monday during his first interview since joining Cerberus, which is based in New York. Any government promise to increase scrutiny would create “a real risk of moral hazard that implies, 'Don't worry. Now the government is watching over you and there aren't any problems.'”

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November 3, 2006 in Regulation | Permalink




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