A Clinton administration task force is expected today to conclude that significant government regulation of hedge funds is not necessary.

Officials from the President's Working Group on Financial Markets briefed lawmakers and Capitol Hill staffers late Wednesday on their review of hedge fund regulation, which was prompted by the near failure last year of Long-Term Capital Management.

Subcommittees of the House Banking Committee are expected to hold hearings on the report next week. It was unclear whether the subcommittees would hold joint or separate sessions.

The working group includes officials from the Treasury Department and Federal Reserve Board, both of which have testified previously that strict government regulation of hedge funds would be ineffective because these firms would simply move overseas. Instead, they want lenders to improve how they manage the risk of extending credit to hedge funds.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.