ECB voegt zich bij de critici van EU-plannen tegen hedgefunds (en)
The European Central Bank has added its name to the extensive list of critics of EU plans to clamp down on the hedge fund sector, saying over-regulation could drive the industry out of Europe.
The European Commission came forward with a draft directive before the summer to improve regulation of the hedge fund and private equity sectors, with the proposals currently being studied by the European Parliament and member states.
But in a statement published on its website, the ECB says that while it favours stepping up the rules for the lightly regulated sector, the new measures must be mirrored in other countries around the world or else firms in Europe will simply move.
"An internationally co-ordinated response is necessary given the highly international nature of the industry and the consequent risks of regulatory arbitrage and evasion," said the ECB.
"The ECB urges the commission to continue the dialogue with its international partners, in particular the United States, to ensure a globally coherent regulatory and supervisory framework," it added.
The commission plans call for the registration and regulation of all "alternative investment funds".
The funds would be obliged to disclose information on the types of assets it invests in as well as provide details on their use of short selling, one of the tactics blamed for exacerbating the financial crisis.
Non-EU fund managers would also be obliged to comply with the rules if they wished to sell their products within the bloc.
But consensus is growing amongst bankers and EU officials that the commission's ‘one-size-fits-all' approach for all types of funds is too simplistic and needs alteration.
The Swedish EU presidency aims to have some level of agreement on the plans by the end of the year, but a full vote in the European Parliament is unlikely before the second half of 2010.
Prominent Socialists such as MEP Poul Nyrup Rasmussen have attacked the commission proposals as being too weak, while the industry itself has been lobbying hard to have them watered down.
London's mayor, Boris Johnson, visited Brussels last month in an attempt to seek terms more favourable to the EU's financial capital.