Skip to comments.Geithner warns of rift over regulation
Posted on 03/11/2010 12:08:18 AM PST by bruinbirdman
Tim Geithner, US Treasury secretary, has delivered a blunt warning to the European Commission that its plans to regulate the hedge fund and private equity industries could cause a transatlantic rift by discriminating against US groups.
A letter sent by Mr Geithner this month to Michel Barnier, Europes internal market commissioner, makes it clear that the European Union is heading for a clash with Washington if it pushes ahead with what the US and Britain fear could be a protectionist law.
The debate over the shape of future financial regulation has reached a critical point in Brussels. Diplomats were on Wednesday night moving closer to a compromise on the sweeping overhaul that has angered the industry and worried institutional investors.
The draft EU directive would impose tighter restrictions on hedge funds, private equity and other alternative investment funds. It has caused alarm in the City of London, where some in the industry say it is a thinly veiled attempt by France and Germany to undermine the UKs dominance of financial services.
If European diplomats reach agreement at a meeting on Thursday, the directive will be put to EU finance ministers when they convene on Tuesday. The proposed rules will require approval by EU lawmakers.
Mr Geithners one-page letter, sent on March 1, stresses the need for the US and Europe to work together on regulation of the financial services industry.
He underlines last autumns commitment by the Group of 20 nations to avoid discriminatory measures in any regulatory response to the financial crisis.
Mr Geithner warns that US hedge funds, private equity groups and banks could be discriminated against if proposals to restrict the access of EU investors to funds based outside the 27-country bloc are included in the final law.
So-called third country elements of the directive would force non-EU funds to comply with the new rules if they wish to market themselves at all within the EU. The directive could also force EU-based private equity and hedge funds to use only locally based banks as custodians and depositaries.
Contentious areas also include rules on remuneration, limits on borrowing, the disclosure of sensitive information and the regime for depositaries.
Paul Myners, UK financial services minister, told a meeting of private equity executives on Wednesday that he would fight line by line and minute by minute to defend the free movement of capital. But he also warned that nobody in this room is going to get the directive they want.
One senior private equity executive said the UK needed to take a stand before others would rally behind it.
Timmy has no balls.
Why do we have to have One World standards? As a matter of democratic expression, and since the European citizens is the ultimate backer of financial instruments, why shouldn’t those citizens dictate as to their liking?
Geithner should STFU and stick to his own knitting, the destruction of America.
Neither set of the shells have a pea under them; yet they let the public bet & guess on which one has the pea under it.
Not bad at all. Lot’s of room for stuffing wads of dough and the mask, excellent!! Obviously the mask lets the wearer reveal nothing of importance as regards to traceability. CAn I get one by April 15th?
I like to get a so called income tax credit. Just send me yours, we’ll cut out the middle man, and I’ll rebate you ten percent.
Let me see if I can get some suckers to fund a CDS on that first. I’ll then take that infusion of cash to Atlantic City and put 80% down on the Craps Table.....you could then issue a CDO to some other sucker to back my crap game??
Gee, I guess we’ll have to stop importing food and fashion from eu.
After all I am promising you to send you my free Obammy dollars......you can do that....just don’t tell anyone who you’re backing on the deal.
Can we all say: Globally conspired financial leveraging backed by thin air collateral as a means to grow goobermints and skim the dough??
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