EU agrees hedge fund controls

[FarCenter]

European leaders have agreed on draconian measures to crack down on hedge funds, rating agencies and all financial instruments, going beyond proposals by Prime Minister Gordon Brown for soft regulation designed to avoid stifling free enterprise.

By Ambrose Evans-Pritchard Last Updated: 11:26AM GMT 23 Feb 2009

The move to regulate hedge funds poses a potential threat to an industry that has been a mainstay of London's financial growth over the last decade. The only restriction imposed so far is an obligation to disclose all "short" positions on equities.

German Chancellor Angela Merkel, who hosted yesterday's summit of German, French, Italian, Spanish, Dutch and British leaders in Berlin, said the sort of rampant speculation and misuse of leverage that occurred in the credit bubble would not be tolerated.

"We have today underscored our conviction that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile. This is especially true for those private pools of capital, including hedge funds, that may present a systemic risk," she said.

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Diplomats say Mr Brown agreed to restrictions on hedge funds in order to clear the way for an accord.

<snip>

French president Nicolas Sarkozy said Europe would not accept a "cheap fix" on financial regulation. "We want regulation of hedge funds, and we're not going to put up any longer with the bonus reward system of traders and bankers. Sanctions are key. Without sanctions, new regulations are meaningless," he said.

<snip> http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4782765/EU-agrees-hedge-fund-controls.html

[davidwparker]

1. Good. Now maybe my European stocks will go back up. Oversight!!!

[Andy823]

2. Same thing needs to happen here.

These regulations have to be done world wide in order to prevent the same things from happening again. I think what Europe is doing should be adopted by the U.S. and then maybe the people will stop being the victims of greedy people who only care about what they can get and not about anything else! Bravo to the countries that are trying to help this world!

[nbsmom]

3. Are we waiting to see how it goes over there before we do the same here?

I have not understood for quite some time how all of these a-holes are simply reaching into our pockets and taking our savings. No consequence for manipulation. It's a free market in the sense that they unprincipled twits have been freely having their way with our retirement portfolios.

:mad:

[Ghost Dog]

4. And rating agencies.

Riiiiiight...