Unions Irked At EC On Hedge Funds

Date: Wednesday, August 22, 2007
Author: Hedge Fund Daily

Regardless of whether hedge funds are actually to blame for the global financial crisis, the European Trade Union Confederation has accused the European Commission of failing to take seriously the threat “the stupendous growth” of hedge funds pose to the markets. The ETUC said in a statement that for more than a year unions have been warning about the risks of HFs “and how no one can be sure about who is responsible for what, or what the true liabilities are in today’s casino economy.” It takes to task EC Commissioner Charlie McCreevy for past comments that hedge funds are “crucial” as they put the “fear of God” into company boards for the benefit for all. Those statements, says the ETUC, “look like monumental complacency today.” The union called on the EC to join in the effort to investigate the role played by credit rating agencies, bank involvement in hedge fund and credit markets, the lack of transparency in the derivatives market and the lack of effective regulation. “How many more risks like the subprime mortgages are undervalued,” posits ETUC General  Secretary John Monks. “What is the real extent of liabilities of hedge funds and of the banks?” The EC and other institutions, he says, “need to find out quickly, if confidence is to return swiftly and long-term damage averted.”