EU official vows to reach compromise on tighter hedge funds rules

08:21, May 18, 2010      

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A top European Union (EU) financial official Monday vowed to reach a compromise on tigher hedge funds rules despite differences among the 27 member states of the bloc.

European Commissioner for Internal Market and Services Michel Barnier told a press conference that there will be differences at the monthly meeting of EU finance ministers on Tuesday on tightening rules on hedge funds.

"We are by no means out of the woods yet," Barnier said, stressing "a compromise must be reached".

The finance ministers will dicuss new rules to regulate the financial market, including supervision of hedge funds, derivatives and rating agencies.

Britian has been reluctant to pass tigher rules on hedge funds, fearing it will undermine its role as an important world financial center, while Germany and France have been reasoning that lack of supervision of hedge funds partly contributed to the financial crisis.

Barnier said that the EU also intended to draft a law to oversee derivatives, including credit default swaps later this year.

The commissioner emphasized at the press conference that regulation of credit rating agencies will also be stepped up, saying the EU need to create "a more precise methodology for rating sovereign risk".

The EU has blamed credit rating agencies for fuelling the Greek debt crisis and proposed to create a European rating agency.

Source: Xinhua
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