G8 finance ministers meet to discuss hedge funds, aid to Africa

Finance ministers from the Group of Eight (G8) major industrialized nations started a two-day gathering in Potsdam Friday to make preparations for the G8 summit early next month.

The ministers will focus their discussions on issues such as hedge fund regulations, aid to Africa, energy and climate change.

German Finance Minister Peer Steinbrueck, who is chairing the meetings at Lake Schwielowsee near Potsdam, is expected to push for closer scrutiny of hedge funds to address concerns that the private pools of largely unregulated capital pose a potential threat to world financial stability.

The United States, however, has been reluctant to back calls for tougher policing of such funds.

While no formal regulation of the hedge fund industry is planned, Germany has said it is aiming to agree the outlines of a voluntary code of conduct for hedge funds by the end of its G8 presidency this year.

Finance chiefs from the G8, grouping Britain, Canada, France, Germany, Italy, Japan, the United States and Russia, will also meet delegates from Cameroon, Ghana, Mozambique, Nigeria and South Africa in an outreach program to discuss good financial governance and aid to Africa.

In an open letter published by the Financial Times Friday, more than 60 prominent figures, including five Nobel prize winners, urged the G8 nations to honour their aid pledges to the poorest countries and to "implement innovative finance mechanisms as a key source of much needed finance for development."

The ministers may also discuss a possible successor to World Bank President Paul Wolfowitz, who quit late Thursday, bowing to international pressure sparked by an ethics controversy.

Citing a busy domestic schedule, U.S. Treasury Secretary Henry Paulson has decided to stay away from the gathering and sent his deputy Robert Kimmitt to represent Washington at the meetings.

Source: Xinhua