By Martin Banks - 16th March 2010
We share a common position
Sharon Bowles
A leading American official says the US and the EU are "remarkably close" on ways to reform the financial markets.
The claim, by Gary Gensler, of the US commodities and futures trading commission, comes amid demands that the EU "stand firm" on plans to regulate hedge funds.
In a letter to internal market commissioner Michel Barnier, former MEP Poul Nyrup Rasmussen says the EU "should not be dictated by American considerations."
He wants Barnier to "show resolve in the face of concerted pressure" from US and UK lobbyists for the hedge fund industry.
The letter says, "We think the regulation of the hedge funds market should not be dictated by American considerations, as they are obviously aimed at protecting particular interests or specific privileged actors."
His appeal on Tuesday comes as EU finance ministers were due to meet to decide on regulation of hedge funds and private equity managers.
Ministers will decide on the controversial alternative investment fund managers directive. Some, such as London mayor Boris Johnson, and many in the city of London, fear the draft law will discriminate against the hedge funds industry.
However, Gensler attempted to defuse any suggestions that the US was trying to undermine efforts to regulate the financial sector.
Speaking at a news conference in the European parliament on Tuesday, he said, "I think we are remarkably close on this to both the EU and UK."
He was speaking after addressing the economic and monetary affairs committee and the day after meeting Barnier to discuss the issue.
He told journalists, "I firmly believe that what brings the two sides together is far greater than what separates us on the issue of reform.
"Having spoken to the committee and Barnier I believe we are remarkably close on financial reform. What we have to do is work together in order to get the right result."
He added, "The need for reform is understood by both Republicans and Democrats in the US, although I accept that differences of opinion do exist on the detail of what is necessary."
Speaking at the same impromptu conference, the committee's chairwoman, British ALDE deputy Sharon Bowles endorsed his comments.
She said, "I support regulation that is proportionate and intelligent.
"I am aware of what Rasmussen has said. Let me reassure you that there is no gap between what the EU and US are trying to do here.
"We share a common position. While I want regulation that covers the whole market, you have to accept that certain areas have to handled with care.
"This is what the EU and US are trying to do, in leading the world on the reforms which are necessary."
Earlier, Gensler told the parliamentary committee, "The 2008 financial crisis was global in nature. The financial system and financial regulatory system failed the test.
"So many people in Europe and the US who never had any connection to derivatives or exotic financial contracts had their lives hurt by the risks taken by financial actors."
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