Commissioner McCreevy agrees with PES President on hedge and private equity funds
MCCREEVY - "There's one thing I agree with you Mr Rasmussen"
RASMUSSEN - "It's not good enough but it's a start Mr McCreevy"
5 September 2007
European Commissioner Charlie McCreevy told the European parliament that he agreed with PES President Poul Nyrup Rasmussen that more transparency was needed for hedge and private equity funds. However, he rejected the calls of the PES President and other MEPs for new regulations to force improved transparency and disclosure.
In a speech to the European Parliament, during a debate on recent financial instability attended by European Commissioners Joaquin Almunia and Charlie McCreevy and the Portuguese Presidency, Poul Nyrup Rasmussen warned that the recent financial crisis should act as a "wake up call" for new regulation on hedge and private equity funds.
In remarks addressed directly at Commissioner McCreevy, the PES President
- asked the Commissioner if he was ready to introduce regulations to "protect pension funds" from the risks associated in investing in private equity and hedge funds that do not conform to disclosure rules applying to publicly-listed investment companies;
- challenged the Commissioner "how can you defend that hedge and private equity funds are the last resort without any regulation?"
- finished by stating that "now is the time to put new regulations in place"
Poul Nyrup Rasmussen believes that pension funds and other investors in hedge and private equity funds are running risks similar to those taken on by the German banks that invested in the high-interest yielding American sub-prime mortgage market.
The PES President said after the debate "It's not good enough Mr McCreevy, but it's a start."
"I am very happy that Commissioner McCreevy is now convinced of the need for more transparency, and I look forward to his proposals for achieving it. I know he will do all he can to avoid regulation. But private equity and hedge funds will not be able to escape regulation for ever despite the best efforts of the current Commissioner. Today's debate in the European Parliament marks a new level of political pressure for fresh regulation."
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