May 21, 2010
By Aoife White - AP News
Copyright AP News
Brussels, Belgium -
European Union governments overrode British objections - and U.S. worries - by agreeing Tuesday to tighten rules for freewheeling hedge funds, a move some fear will block American funds from the region and cause the lucrative industry to flee London's financial district. The decision reflects Europe's newfound resolve to strengthen its regulatory grip on financial markets and crack down on what officials call speculation, which some blame for worsening the financial crisis. .... Some 80 percent of European funds are based in Britain - which failed to muster support for its call to give a foreign fund the automatic right to market itself anywhere in the 27-nation bloc once it is cleared to do business in one country. France and others fear that Britain's softer regulatory touch could allow risky and unsupervised foreign funds free access to the rest of Europe........U.S. Treasury chief Tim Geithner has complained that this was a "protectionist" move that could shut American funds out of the EU. These funds manage some euro250 billion ($311 billion) in assets in Europe.
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