Threat grows of broader regulatory deadlock (hedge fund-private equity firm regulation - EU/US)

[pampango]

Source: UK Financial Times

Negotiators from EU member states appeared poised to agree a compromise text of the directive, a move that would have been a big milestone in the convoluted negotiations by which European Commission proposals become law. In the wake of a strident letter from Tim Geithner, the US Treasury secretary, EU ambassadors in Brussels failed to agree a compromise. By noon yesterday the meeting was over and negotiators left the closed-door session with no agreed-upon text to take to their political masters.

Politicians around the world have agreed on the need for common standards, but many - particularly in the US - seem only belatedly to be waking up to the fact the EU appears determined to set them.

According to Robert Coke, a senior executive at the Wellcome Trust, one of the UK's biggest investors in hedge funds and private equity, there is a danger of a "tit-for-tat response from the US". This prospect, however, has caused anger in Brussels. "The US intervention has made the whole process very fraught," one EU lobbyist familiar with the negotiations said. "The French are angry because they think this is meddling."

For those present at yesterday's meeting, the disagreements boiled down to two main sticking points. The first concerned the directive's handling of depository institutions, and which ones hedge funds and private equity firms must use.

The second concerned the so-called third-country rules, which deal with how stringently non-EU funds must comply with the directive in order to be able to market themselves within the EU. It is on this point that Mr Geithner is particularly concerned. According to a memorandum of the meeting seen by the Financial Times, the UK, Czech Republic, Ireland, Malta, Austria and France all raised objections.




Read more: http://www.ft.com/cms/s/0/6889efc0-2d77-11df-a262-00144feabdc0.html

[Demeter]

1. The French Are Right

Geithner is attempting to meddle. They should brush it off with Gallic aplomb, though. Geithner has a busted flush at best.

[MannyGoldstein]

2. Geithner's Battling an Assault on Obama's Beloved Priveleged Class

Good luck, Timmy!

[aquart]

3. Obama should be ashamed of Geithner. Yet he's not.