AIFM directive

Bank of England
Open Europe reports that European finance ministers are expected to agree a draft of the EU's proposed AIFM Directive, aimed at regulating hedge fund and private equity managers, next Tuesday. It appears that "even the British government...has given up its blockade."

The UK is currently struggling to find enough allies among other member states to water down the Directive's restrictions on foreign funds and fund managers - restrictions that would cut off most foreign funds and managers from the EU market, and therefore radically limit the choice for EU-based institutional investors such as pension funds and charities. The FT reports that Tim Geithner, the US Treasury Secretary, has delivered a blunt warning to the European Commission that the protectionist elements of the Directive could cause a transatlantic rift by discriminating against US groups and restricting the access of EU investors to funds based outside Europe.

Paul Myners, UK Financial Services Minister, told a meeting of private equity executives yesterday that he would fight "line by line and minute by minute" to defend the free movement of capital. But he also warned that "nobody in this room is going to get the directive they want".

If this is going to have an adverse effect on the City of London, at a time when we have crippling debts, why not just say NO?