According to the former chief executive and chairman of F&C Asset Management, the investment management industry must join the "titanic tussle" over financial regulatory reform, as it is the only industry with the "credibility and clout" to shape the debate.
Robert Jenkins, now a member of the Bank of England's financial policy committee, said that while academics had weighed into the debate surrounding financial regulation in the aftermath of the financial crisis with "truth and light", they did not have the political influence to fight on behalf of a "formidably funded" banking lobby.
He added that it might strike some as "rich" to ask the investment management industry to support regulators that had "harangued and harassed" them, but the only way to correct what he viewed as misplaced blame was to "speak up and stand out". He acknowledged that some individual agents in the industry – including the CFA and Investment Management Association – had taken a stand on select issues, while others have rallied around audit reform, but he said such instances were still all too rare.
Jenkins estimated that the average hedge fund would be leveraged significantly less, around three times, but that they were not supported by a "taxpayer backstop". He argued that, with the old financial structure crumbling and a "brittle" new system on the rise, investment managers must act, if only because their clients will have to function within the system's restrictions.
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