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After market turmoil, Merkel says 'I told you so'
September 20, 2008 / 3:44 PM / 9 years ago

After market turmoil, Merkel says 'I told you so'

LINZ, Austria, Sept 20 (Reuters) - German Chancellor Angela Merkel indirectly criticised the United States and Britain on Saturday for thwarting her government’s previous attempts to tighten controls on financial markets.

Speaking at an election rally in Austria, Merkel said on Saturday her government tried in vain to win G8 support at a summit last year for tighter regulation of hedge funds and said the financial market turmoil would hurt people outside markets.

“It was said for a long time ‘Let the markets take care of themselves’ and that there is ‘no need for more transparency’,” Merkel said at a rally in Linz, where she was campaigning on behalf of the Austrian conservative People’s Party (OeVP).

“Today we are a step further because even America and Britain are saying ‘Yes, we need more transparency, we need better standards for the ratings agencies’,” said Merkel, leader of Germany’s conservative Christian Democrats.

”And I’d like to add that everyone who produces a real product knows what it looks like and what standards it is up to,“ said Merkel, chancellor since 2005. ”One also needs to know with a financial product what’s involved.

“Otherwise, these sorts of things happen that we then all have to pay for,” she said.

Merkel had hoped to reach a common position on hedge fund transparency in 2007 when Germany held the rotating presidency of the Group of Eight, which includes the United States, Japan, Germany, Britain, France, Italy, Canada and Russia.

Germany had expressed fears that hedge funds could threaten the stability of the financial system through their heavy reliance on borrowing to finance risky trading strategies. It has also raised concerns about private equity funds. (Reporting by Carsten Lietz, writing by Erik Kirschbaum)

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