14/01/2009
Socialists demand clarification on regulation of private equity
Three leading Socialists have written to Commission President Barroso demanding clarification “on how the Commission proposes to proceed with its commitment to ensure appropriate regulation for private equity.”
Poul Nyrup Rasmussen, President of the Party of European Socialists, Martin Schulz, President of the PES Group in the European Parliament and Pervenche Berès, Chairwoman of the European Parliament’s Economic and Monetary Affairs Committee, put the question in a letter handed personally to President Barroso yesterday in response to assurances received from Barroso that “No financial player should be exempt from regulation and oversight. It means that hedge funds and private equity must be covered.”
The three Socialists point out that while a consultation has been launched on hedge funds – which Barroso assures them “is not to decide whether or not appropriate regulatory initiatives will be taken. It is to decide on the content” – Barroso is not clear on what will be done on private equity.
The three socialists write “Commissioner McCreevy told the Economic and Monetary Affairs Committee on 1 December that he will report back to Parliament on industry codes for self-regulation. This is not enough.”
The three go on to say “We do not understand how Commissioner McCreevy’s faith in voluntary codes of conduct for private equity is compatible with the assurances we have received from you.”
They conclude “We underline not only that action is needed, but that it is needed urgently. We expect to have proposals in time for the next European Council of 19-20 March and for Parliament to begin its deliberations before the 2009 European elections.”
Note - In December Rasmussen, Schulz and Berès wrote to Barroso expressing a lack of confidence in Commissioner McCreevy due to his lack of action in response to the Parliament’s demand for regulation covering all financial players including hedge funds and private equity. Barroso replied on 18 December assuring them that hedge funds and private equity would be regulated. The letter given to Barroso yesterday is a follow-up to Barroso’s reply.
