London and Paris Hedge Funds

London and Paris Hedge Funds

London and Paris Square Off Over Hedge Fund Regulation

The UK, particularly its capital city, has been a staunch ally of hedge funds in the push back against regulation while other European Union countries such as France have been pushing for tough regulations on the industry.  Now, the two countries are set to face off over the regulations--all within weeks of UK elections--and neither side looks willing to compromise.

Such a move is likely to escalate a long-running spat between Britain and France over how to treat foreign funds under the new regime.
Privately, Paris has threatened to use European Union voting rules to push through the law over the objections of Britain, said diplomats.
With London largely isolated on the issue, it would be easy for France to win the backing of a majority of European countries to sign off the law. 
But this would break with European diplomatic practice where large countries like Britain are rarely bullied into accepting something they do not want.
Michel Barnier, the French commissioner in charge of an overhaul of financial services across the European Union, has intervened to head off a full-scale row between the two countries.
But at a meeting last week in Madrid, French economy minister Christine Lagarde told Barnier France was standing firm and would not concede to British demands that foreign funds be entitled to a license to do business across all 27 EU countries.  Source

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