U.S. opposes Europe hedge fund rules

by Stephen Beard

U.S. officials say if the planned regulations take effect, the U.S. hedge fund industry will suffer badly. It’ll mean American funds will find it much tougher to make money in Europe. The proposed rules are restrictive. Hedge fund managers would have to reveal details of their investment positions. There would be limits on how much they can borrow and on how much they can pay their staff.

Ian Morley, from the Allenbridge hedge fund consulting firm, says the Europeans are unfairly blaming hedge funds for the financial crisis.

“It wasn’t the hedge funds that created the subprime loans and it wasn’t the hedge funds that mismanaged the Greek economy,” says Morley. “We simply took positions in the market where we said this has gone ridiculously out of control and as a result of that, we warned the world about it. And people don’t like bad news.”

The U.K. is home to 80 percent of European hedge funds and it also opposes the plan. If it is approved today, it could be a year before it comes into force.