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Germany Says Paulson Signals Open to Hedge Fund Transparency Talks

U.S. Treasury Secretary Henry Paulson signaled that he is open to Germany's idea of having the Group of Eight discuss ways of making hedge funds more transparent, a Finance Ministry official said Thursday.

Paulson met with German Finance Minister Peer Steinbrueck and also was meeting Chancellor Angela Merkel during a brief visit to Berlin. Germany takes over the presidency of the G-8 on Jan. 1.

Steinbrueck and Paulson talked about the German presidency of the group of industrialized countries "and also about hedge funds," Finance Ministry spokeswoman Ulrike Abratis said.

"The focus is ... transparency and not regulation," she added. "Paulson has signaled that he is open for such a discussion."

Germany wants major economic powers to explore ways to make it easier for investors and others to obtain information about hedge funds, whose rapid growth has brought worries that they could pose a risk to the worldwide financial system.

Hedge funds _ high-risk, largely unregulated and secretive investment pools _ have traditionally been the investment domain of the wealthy but have become popular with small investors in recent years.

Officials have said Germany is not advocating that industrialized countries regulate hedge funds but rather that they examine ways to bolster the funds' openness and mitigate potential risks.

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