Widerstand gegen Hedgefonds steigt, McCreevy isoliert

Internal Market Commissioner Charliee McCreevy said yesterday in the Parliament: "We should not make the mistake of perceiving all activities of hedge funds as a threat to the market but we should also be aware of the positive effects that their activities have. Let me be clear that the EU economy is going to need massive investment in the time ahead. Without SWFs, private equity and the like, Europe's recovery from today's turmoil will be all the slower."

Party of European Socialists (PES) President Poul Nyrup Rasmussen called on the Commission to react to his report "by the end of the year" (see related EurActiv interview).

Socialist MEP Gianni Pittella commented: "With the vote of today on the Rasmussen report, the European Parliament launched a clear signal to the European Commission and to commissioner Charlie McCreevy: in the framework of the review of the rules governing financial markets, private equity and hedge funds cannot be excluded".

EPP-ED Group MEP Klaus-Heiner Lehne, rapporteur of another report on the transparency of institutional investors,  underlined that "risks taken should be reasonable, and that measures to put an order are necessary".

Conservative MEP John Purvis said: "The response from Europe should be measured and international. We should accept that there needs to be a greater level of openness and transparency from hedge funds but the European Parliament is right to avoid rushing into overzealous legislation."

ALDE MEP Sharon Bowles pointed out to the increased necessity for "more transparency" and warned for the need of higher controls on pension funds. She also added: "Regulation must be non-discriminatory and must be part of a broader overall package of monitoring risk. A smart, forward looking approach is needed if we are to prevent not only the recent crisis but also any other potential mishaps. Voluntary codes have only very recently been adopted by hedge funds and must be given more time before we make any determinative judgements".

Eurosceptic Scottish National Party (SNP) MEP Alyn Smith commented: "I reluctantly voted for this report, but have no enthusiasm for it.  The eventual compromise is muddled, and crucially could be taken to be a call for a massive increase in EU competence where in my view financial regulation, like tax, should remain firmly with the member states themselves".

In a statement the Committee of European Securities Regulators (CESR) underlined: "EU securities regulators are closely monitoring the functioning of the markets under the current circumstances and are considering together possible actions which might be taken to contribute to orderly functioning markets. Any such actions will be taken with a view to strengthening confidence in financial markets and protecting investors."

The hedge fund industry, represented by AIMA, the Alternative Investment Management Association, commented in a statement on the bans on short-selling: "These measures have the potential to create several unfortunate consequences, including an increase in the cost of capital for banks, at a time when it is most needed and incorrect pricing of index products, with negative implications for mainstream retail products."

EVCA, the European Venture Capital and Private Equity Association, stressed the distinction made by the Parliament and by McCreevy between hedge funds and private equity. Javier Echarri, EVCA's secretary-general, said: "Private equity has been recognised by the European Parliament as key to corporate competitiveness and innovation. Any regulation of this sector should be proposed in the context of cost and benefit. Our work to achieve the maximum understanding of our business model and its role in Europe's economy continues, but we welcome the prudent approach of the Commission outlined today by Commissioner McCreevy."