Despite Charlie McCreevy’s assertion that the European hedge fund industry shouldn’t be regulated, a growing consensus is emerging within the industry for some sort of over-sight.
Speaking at an International Organisation of Securities Commissions (IOSCO) conference on November 16th, Fink said Stanley Fink, the chief executive of one of the largest institutional hedge fund managers, the Man Group, said that he supported measures to improve the quality and transparency of the hedge fund industry.
Huw Jenkins, chief executive of UBS Investment Bank, supported Fink’s approach, and told the IOSCO conference that UBS supported the idea of more transparency in the hedge fund industry.
However, the man in charge of determining whether or not a regulatory regime should be introduced in Europe, Internal Markets Commissioner Charlie McCreevy, is still against the idea.
On several occasions McCreevy has expressed his hesitancy his view that there is ‘no need for specific legislation’ for the hedge fund sector, and this was vindicated in the Commission’s recent White Paper on the funds industry, which concurred with McCreevy.
In a recent interview in Edinburgh, McCreevy said that introducing Europe-wide rules may hold back the industry and prompt managers to shift operations from the continent to less- regulated jurisdiction, addi,ng, ‘if we went too far we could drive the industry out of Europe’.
Writing on page 11 of this issue, Professor Ray Kinsella of the Smurfit Business School, argues in favour of a hedge fund regulatory regime, for two reasons. ‘Firstly, on the grounds of the latent instability of hedge funds, arising from their enormous leverage as well as developments in hedge fund markets in recent years. The second reason has to do with a more philosophical, but nonetheless important point, which relates to an emerging fracture between increasingly complex markets and their relationship to the real macro-economy,’ he writes. |
