Brussels, 21/02/2007 (Agence Europe) - In an interview to the Financial Times on Tuesday 20 February, Charlie McCreevy declared: “Hedge funds and private equity are good for the market”. The commissioner for the internal market again defended the activities of these funds on the financial markets, in response to those in the EU who have spoken out against the risk these funds could have on market stability. He gave the following analogy: “Suppose we could decide what we are regulating. What would we achieve with all that? Unless we got a global agreement, all they would do is move off and leave Europe”.
He welcomed, however, the recent decision by finance ministers from the group of seven most industrialised countries to further analyse activities in this sector (EUROPE 9364). Mr McCreevy considered that the Commission had no reason to respond because “as yet, there has not been a threat to financial stability”. He explained that if there were a threat, it would be up to the national “regulators to make sure that no element of the banking industry is over-exposed to hedge funds”. He criticised the position of those in some member states who complain about increased surveillance of these funds when, what they wanted was to crush them through regulation until they disappeared. This, the commissioner explained, was because “they don't want any type of shareholder activism”. (mb)