Posted on 05/14/2005 10:31:58 AM PDT by TigerLikesRooster
Germany to probe hedge funds
By Hugh Williamson in Berlin, Richard Milne in Leipzig and Patrick Jenkins in Frankfurt
Published: May 13 2005 20:23 | Last updated: May 13 2005 20:23
Gerhard Schröder, German chancellor, on Friday ordered a government review of controls on hedge funds, saying he might consider imposing tighter curbs after foreign investors helped topple the management of Deutsche Börse, the German stock exchange group.
Mr Schröder said there might be an argument “in favour of closer scrutiny” of hedge funds to check whether their philosophy was “compatible” with German society, adding: “This is the issue that needs to be considered.”
The chancellor had ordered three ministries to mount a co-ordinated review “to achieve, where necessary, more transparency, and where possible, tighter controls”, his spokesman said.
Hans Eichel, Germany's finance minister, on Saturday echoes Mr Schröder's call for closer scrutiny of hedge funds. In a newspaper interview he proposes “a Europe-wide supervisory body for hedge funds based on the German model”.
The government review follows the ousting this week of Werner Seifert, Deutsche Börse's chief executive, and Rolf Breuer, its supervisory board chairman, by international investors led by hedge funds TCI of the UK and Atticus of the US.
The move comes amid a wave of criticism of short-term investors by leaders of the ruling Social Democrats. Franz Müntefering, SPD chairman, last month accused international investors of acting like “locusts” by picking off German businesses.
Mr Schröder, speaking at the opening of a BMW car plant in Leipzig, said his criticism was not a general attack on foreign investors or private equity funds. “We need foreign money coming into the country.”
It was unclear last night what changes the review might recommend. Senior officials in Berlin hinted the chancellor's intervention was aimed at rallying SPD support for the regional election in North Rhine-Westphalia next weekend. “This is really about politics,” said one.
Hedge funds reacted angrily to the review. “This whole debate is crazy, groundless rubbish,” Achim Pütz, chairman of the Bundesverband Alternative Investments said. The BAI, which represents about 100 hedge funds, including Man Group and Goldman Sachs in Germany, said the unseating of Deutsche Börse management had nothing to do with hedge funds. “It has to do with good, sound arguments that convinced a majority of the group's investors,” said Mr Pütz.
UK and US based hedge funds have been increasingly active in Germany in recent years. The chancellor is to present results of the review on June 13 in Berlin at an SPD conference.
Ping!
Doesn't Soros own a couple of these?
Right.
It would be fraudulent for the German government to allow companies to issue shares, assuring the public that shares carry enforceable rights (including the right to vote), and then punish shareholders for exercising those rights.
I just hope this doesn't make it harder for George Soros to bankrupt economies by manipulating markets.
Otherwise, MoveOn.org might have no useful function at all.
*/ :^ )
Rats and an international speculator, a perfect union.:-)
No major political party in the history of the United States has been at the beck and call of a single ultra-rich puppet master as the Democrat party is today.
Gee, I can't imagine George Soros, who own some of those things, would do anything to endanger the economy of Germany or any other country.
The guy's a humanitarian.
[/sarcasm]
Once rules are established within a country, and the funds are allowed to sell...its difficult for a government to come walking back in and try to take control or manipulate sales. Schroeder may be trying to make the incompetent fools of the Frankfurt stock exchange think he is helping them...but in reality, the government will just sit this one out. If he does start to make governmental changes and affect the entire stock investing concept for foreigners...then people will saya adios to German investment chances, and take their money to some other country...thus drying up Frankfurt and making them a lesser stock market. This would be a very foolish episode, and perhaps win brief applause from the Frankfurt stock boys...till they realize how badly they just got screwed over.
I will say this as well...the Frankfurt stock market has been taking major steps over the past five years, and really become a huge powerhouse. They are trying to influence world investment around them (lessening Paris, London, and New York)...and I would wonder if Schroeder's moves here...might be calculated in a different manner.
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