BERLIN, Aug 18: Recent turbulence on global markets has highlighted the need for greater transparency, particularly when it comes to hedge funds, German Chancellor Angela Merkel was quoted as saying on Saturday.

In the case of hedge funds, we need to know where the capital comes from and how high the credit risks are, Merkel said in a preview of an interview to appear on Sunday in Bild am Sonntag newspaper.

She added that the world's top rating agencies should also be more open about the way they arrive at their ratings.

In the future it should be clear what the basis of their ratings of companies is, Merkel said. There can't be some black box from which something comes out and which no one understands.” Merkel's comments reflected her frustration over Germany's failure to get an agreement among Group of Eight (G8) industrial nations on how to improve the transparency of hedge funds.

She said the developments in recent weeks show “how urgent it is that we have greater transparency on international financial markets. It's unsatisfactory that that it takes so long to agree on the appropriate international measures, Merkel added.

The US, a G8 member, has resisted any attempt to get an agreement that would require greater openness on the part of hedge funds. German government spokesman said Berlin was pleased that the EC plans to review the voluntary code that guides the work of top rating agencies.—Reuters