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In an intervention on Lehne and Rasmussen reports before the European Parliament, Commissioner McCreevy repeated that he does not intend to propose any additional regulation on Hedge Funds and Private Equity. “Hedge funds and private equity were not the cause of the current turmoil”, he said. “I don't believe it is necessary at this stage to tar Hedge Funds and Private Equity with the same brush as we use for the regulated sector.”
Special obligations on Hedge funds and Private Equity would result in discrimination as other institutional investors have similar objectives and nowadays use similar techniques, he said. Also, not all activities of hedge funds are a threat to the market but have positive effects, he explained. However, “certain techniques, such as stock lending and the use of derivatives do pose challenges to established models of governance”, he said. “This is an area we in conjunction with national supervisors will be giving close attention to in the time ahead.”
The Commissioner identified three key areas in the Rasmussen report, which include:
McCreevy confirmed his former announcement to come forward with an amendment to the Capital Requirements Directive and a regulation on Credit Rating Agencies.