The top EU financial official, Charlie McCreevey, is seeking greater transparency from European hedge funds, amid pressure from politicians and citizens. This comes amid increased calls for hedge fund transparency in the US. McCreevey said noted "undesirable levels of leverage in hedge funds, or excessive lending to private equity managed companies."
He also acknowledged the role of leverage in today's markets with redemptions forcing many funds to sell positions, "Much of the present difficulty encountered by hedge funds and private equity portfolio companies stems from the sudden tightening in cash and securities lending,"
"Those who do not like activist investors should not have a fixation with hedge funds," McCreevy said. "Any policy responses that seek to tackle wider problems by targeting hedge funds and private equity will fail."
European nations will likely discuss this with the U.S., China, India and Brazil when the G-20 group of nations meet in April to chart out ways to fix the financial system.
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