Inquiring minds are looking at France’s attempt to reign in hedge funds. Christine Lagarde, the French finance minister, wrote to US Treasury Secretary Timothy Geithner on regulating hedge funds:
Christine Lagarde, the French finance minister, has written to US Treasury Secretary Timothy Geithner about revising European proposals which would see strict controls placed on the hedge funds across the 27-member block in the wake of the financial crisis.
In the letter, she rebuffed US criticisms that French demands for the new EU rules were protectionist and penalised foreign funds operating in Europe. However, in a change of policy Ms Lagarde said foreign funds would now be allowed to qualify for a pan-European licence if the scheme was phased in and if the new permits were issued by a new EU regulator.
The funniest part of this is that an Obama cabinet member has finally found a regulatory system they are against:
The development represents a change of policy for Paris. Ms Lagarde had previously argued that issuing a EU licence to foreign funds would be a mistake because controls on those operators were unlikely to be tough enough. This led to a stern response from Mr Geithner last week, warning her against placing restrictions on foreign hedge funds.
This is truly a red letter day!
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