Page last updated at 16:36 GMT, Thursday, 13 November 2008

Hedge fund boss backs regulation

Dollar bills
Congress is trying to assess the role of hedge funds in the financial crisis

A US hedge fund leader has told Congress he would be happy to see his industry become more transparent.

Philip Falcone, of Harbinger Capital Partners Funds, said he would support a new central exchange to monitor future credit default swap (CDS) transactions.

CDSs are complex financial instruments that have been blamed for worsening the credit crunch.

Mr Falcone's was speaking to a panel that is trying to assess the role of hedge funds in the financial crisis.

Hedge funds typically attract wealthy private investors and aim to make a profit from investments by using a range of sophisticated strategies.

"An open and transparent market for these transactions [CDSs] would reduce confusion and improve understanding," said Mr Falcone.

He was one of five hedge fund bosses called to give testimony to the US Committee on Oversight and Government Reform.

The other four are Kenneth Griffin of Citadel Investment, John Paulson of Paulson and Co, James Simons of Renaissance Technologies, and billionaire investor George Soros.

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