Brussels, 26/04/2013 (Agence Europe) - For the first time in Europe, the Cypriot bailout raided new types of investment and has done great damage to the financial sector in Europe as a whole, warns the fund management industry of Luxembourg.
The biggest investment opportunities these days lie outside Europe, but one of the rare things the rest of the world envies Europe for is legal security, explained Marc Saluzzi, head of the Association Luxembourgeoise des Fonds d'investissement (ALFI), on Tuesday 23 April in an interview with this newsletter. With alarm bells ringing after investors were required to chip in to the bailout of Cyprus' two biggest banks, Bank of Cyprus and Laiki, rich people in emerging nations are wondering whether their investments in European investment funds are truly safe. In terms of volume, some 20% of the cash in UCITS portfolios, mostly managed in Luxembourg and Ireland, is from outside Europe, mostly Asia.
ALFI warns the European legislator against over-regulation that would punish wide swathes of the financial industry that were not in any way responsible for the financial crisis and have survived these troubled times in a good position. A typical example is the draft financial transactions tax (FTT), as unveiled by the European Commission, that would destroy the commercial model of some types of currency bonds. Stricter bonus rules for UCITS fund managers than for the banks, as provided for in the draft report by Sven Giegold (Greens/EFA, Germany), shows a total misunderstanding of how this industry operates because, unlike the banks, it has in place strict rules on risk-raking by fund managers. (MB/transl.fl)