London’s hedge fund and private equity industry won a last-minute reprieve from contentious new European regulations on Tuesday, after Gordon Brown pleaded that the issue be shelved until after the general election.
The personal intervention by the prime minister staved off certain defeat for Britain at a finance ministers’ meeting in Brussels, where France leads a powerful coalition that is calling for tough regulation of the sector.
So having realised the enormous amount of wealth and money these funds generate in the capital he suddenly realises that letting rival countries have a say in the way one of the last best functioning industries in the UK works may not be in the best national interest. Do I hear a mea culpa? Do I chuff.
But the confrontation has only been deferred. Spain, holder of the rotating European Union presidency, signalled that it intended to secure a deal on proposed legislation on the “alternative investments” sector before its term ends in June.
The grandstanding hasn't stopped, but merely delayed- why you ask?
That could create a bruising early test of relations between an incoming Conservative government – if the opposition party wins the election expected on May 6 – and the rest of Europe on an issue of vital economic interest for Britain.
France and Germany have led calls for regulation of hedge funds and private equity, arguing for more disclosure of trading information to supervisors as they pose a systemic risk. Britain accepts the need for regulation but argues that draft rules would be too onerous.
The proposed EU directive mainly affects Britain: an estimated 80 per cent of Europe’s hedge funds and 60 per cent of private equity firms are based in the UK.
To create problems for the Bory's; typical ZanuNuLayabout gerrymandering sleekitness.
So what does this new directive intend to achieve?
The so-called Alternative Investment Fund Managers directive would regulate private equity and hedge funds as well as various other “alternative” funds – such as for commodities, real estate and infrastructure, writes Nikki Tait.
Core measures include requiring fund managers to obtain authorisation before they operate in the EU; satisfying authorities about their internal risk management arrangements; providing certain information to investors; rules on leverage and custodial standards; and rules for offshore funds and managers located in so-called third countries.
The directive must be approved by member states and by the European parliament before it can become law.
So fund managers, with billions entrusted to them by investors to whom they are accountable, to look after their money and make it work for them, are expected to be answerable to an unelected, unaccountable quango in Brussels? Part of the same quangocracy and mediocracy that hasn't had it's own accounts signed off for God knows how long?
The European Commission says the AIF sector in the EU managed about €2,000bn ($2,720bn, £1,900bn) in assets at the end of 2008.
€2 TRILLION is a lot of money from which to cream off a healthy crust (not accounting for all this other points the cash is striped from our unwilling hands. Kerching!
Knowing that Britain would be outvoted in Brussels on Tuesday, Mr Brown made a last-ditch appeal to José Luis Rodriguez Zapatero, his Spanish counterpart, to defer a decision by finance ministers on the directive. Downing Street rejoiced at what it portrayed as a diplomatic coup for Mr Brown. “Gordon has spent years building up political capital with key allies in Europe,” said one aide. “Mr Zapatero was very understanding.”
Spain said it wanted to take more time to get a better result.
Pure political point scoring being played by Mr Brown - in the short term he has mitigated the effects of an unelected quangocracy's decisions to further ruin the finance industry of the UK by palming off any decision to the Bory's (potentially) in the next parliament. What's the betting limpet Brown will be on the opposition benches after the GE heckling them about not protecting the finance industry?
And just to prove where the "opposition" lies on this:
However, Mark Hoban, Conservative spokesman for the City, said Mr Brown had been forced to plead for a deferral because he had failed to dilute the directive at an earlier stage. The Tories would base a Treasury minister in Brussels to monitor future legislation.
Notice this is an admission that, either way there is nothing either party can do to stop this; if the EU wants control of this area they will regulate it into submission; this is it's modis operendi since day 1. Also notice that the Bory's actually welcome the chance to interfere in yet more things.
The key issue holding up a compromise deal was disagreement over the conditions on which funds and fund managers based outside the EU – including London-based managers running offshore funds – should be allowed to market to professional investors within the 27-country bloc.
You know all that money we've been buying up Chinese and far east goods with al these years? Now that there is a way of investing that back into the West they want to stop it.
Let me say this as plainly as I can; there was a time long before governments, national or federated, thought their job was to interfere in every facet of our existence; they knew their only role was to protect mens freedom to go about their business without harressment - if a Bernie Madoff-type defrauded you of your lifetime savings he could be tried and put in choky and his assets stripped to pay you back.
The crunch, heck me losing my job, was not caused by greedy bankers and hedge funds; it was caused by the housing being overinflated in an environment of low central-bank interest rates - Brown even then was on course for screwing up the competitiveness of our finance industry and needed an "opiate" to distract us- he was quite happy to let us think the price of bricks and mortar were rising whilst we bet the value of them on our credit cards and the never-never. It is ironic that Spain holding the big seat in the EU and trying to make these laws is also the country which proves it had nothing to do with the banks as that link shows.
When the dust on our country finally settles and we are left impoverised as a result of strangling regulation and job losses, cold when practical proof of the fact that climate change was a con comes in the form of freezing winters and a decrepit, failing energy infrastructure and angry at our increasingly worthless mps, their troughing of the few remaining taxpayers and wonderment that noone in the market wants to buy the hard work of our children and grandchildren (don't get me started on GILTs), when all this has come about the only people to blame will be the ones who felt that these things didn't matter, that all we needed was to change to the "other guys" intent on fixing our broken society without understanding why it was broke in the firstplace.
You vote the same, you get the same.