George Osborne defeated over EU's hedge fund curb
George Osborne today failed in his last-ditch bid to overturn European plans for a major crackdown on London's multi-billion pound hedge fund industry.
The Chancellor of the Exchequer was defeated by EU finance ministers who backed new rules for hedge funds and private equity groups which critics claim will be highly damaging to the sector and to London in particular.
Osborne, who was today in Brussels for the first time since taking office, disagreed with large parts of the new directive but claimed the deal was all but done while Labour was in power.
The new measures, which are expected to take effect in 2012, will require all managers of so-called alternative investment funds to register and comply with reporting requirements. They also seek to curb risk-taking and pay.
"Europe's proposed regulation of hedge funds and private equity firms is a backward step," said Ian Morley of hedge fund advisors Wentworth Hall.
A statement issued after the meeting in Brussels said that concerns voiced "by some member states" — thought to include Britain although it was not named explicitly — would be taken into account.
The Government sought to play down the impact of the defeat.
"This is the best possible outcome, it shows what committed, intensive and fleet-footed engagement can do," said an official.
