Representatives of the Securities and Exchange Commission, the Federal Reserve Bank, the United Kingdom’s Financial Services Authority and Swiss and German regulators met in November with lenders to the hedge fund industry, including Goldman Sachs, Morgan Stanley, Bear Stearns, Merrill Lynch & Co., Lehman Brothers Holdings Inc., JPMorgan Chase & Co., Citigroup Inc., UBS AG, Credit Suisse Group and Deutsche Bank AG. The purpose of the meeting was to gain information on how lenders and prime brokers determine the collateral required from hedge funds.

Regulators are concerned that the margin required from banks to cover potential losses may be insufficient. SEC Commissioner Annette Nazareth said it is uncertain what steps, if any, regulators might take.

Tim Geither, President of the New York Federal Reserve Bank, stated that the matter is complicated and that it was difficult to “try to figure out whether you can bring about change that may be in the broader interests of all market participants.”