Just heard on BBC business news that EU finance ministers have agreed to toughen the hedge fund industry regulations. And of course, as night follows day, wallstreet doesn't like it at all.
BBC
European Union finance ministers have agreed to introduce tougher regulation of the hedge fund industry.
Ministers overrode objections by the new UK government and the City of London, where 80% of European funds are based.
They will now negotiate with the European Parliament to decide the exact shape of the legislation - which is due to come into force from 2012.
However, the final deal would take account of UK concerns, the EU said.
...
France and Germany are pushing these tougher regulations despite London's and wallstreet's 'apprehensions'.
But there are concerns about implications for London's hedge fund industry, particularly that the rules will make it harder for fund managers to find investors across the EU's 27 countries.
Some European governments, notably France and Germany, have long suggested that hedge funds pose a risk to the stability of the world's financial system and so need more regulation.
"We are determined to accelerate the pace of regulation," said Wolfgang Schaeuble, Germany's finance minister.
"Up until now this was not regulated. This hole will now be closed."
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The finance ministers have proposed rules that do not give hedge funds the automatic right to trade across the 27-nation bloc.
Instead, fund managers who wanted to market to the EU will have to qualify through a new passport-style system.
And of course, the US government has objected to these measures calling them "protectionist".
Andrew Baker, chief executive of the Alternative Investment Managers Association, said the plans were "very disappointing" and would "effectively ban EU investors from investing outside Europe".
"This will have negative social consequences across the EU because it will be European institutional investors like pension funds who will be affected," he said.
The US government has also objected to the plans to restrict trade, labelling them protectionist.
Go figure. But the EU finance ministers seem determined, so that's a good news for now. Guess frantic lobbying will break out now all over EU. But at least someone now shows some guts to do something about these thieves. Let's see what happens next.
PS: This was just breaking and so don't have much details. That BBC link has a few more tidbits.