Financial Markets

Treasury Secretary Henry M. Paulson, Jr. delivered remarks today with the chairmen of the two private sector committees for hedge fund investors and asset managers, created by the President’s Working Group on Financial Markets. The groups released their separate sets of best practices for industry participants, first announced in June 2007.

Sec Paulson said:

In February of 2007, the President’s Working Group on Financial Markets, the PWG, released principles and guidelines for private pools of capital to guide market participants and regulators. The PWG principles and guidelines were not at the time, nor are they today, an endorsement of the status quo. When the Treasury Department and key independent financial regulators come together and speak with a unified voice, it sends a strong message that heightened vigilance is necessary and appropriate and that all stakeholders have an important role to play.

The PWG principles have already been put into practice, and today’s release reinforces our belief that a combination of robust market discipline and regulatory policies best protect investors and mitigate systemic risk. For over a year, regulators have been implementing these principles for public policy objectives. Likewise, lenders, counterparties and creditors are also using them to strengthen their practices. To complement and further improve the effectiveness of these efforts, the PWG called on a diverse set of leaders from both the asset management and investment communities to review and significantly enhance their respective market practices.

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