Anglo Saxon model not the cause of financial crisis

ANGLO SAXON MODEL NOT THE CAUSE OF FINANCIAL CRISIS

Speaking at a Round Table event yesterday on the European Commission's Communication on the de Larosière report, which lays out a framework for financial supervision in the EU, Richard Saunders, Chief Executive of the Investment Management Association de-bunked the myth that the Anglo Saxon model of finance and regulation was the cause of the credit crisis.

Mr Saunders commented:

"This is nonsense - the problems in continental European banks have been at least as bad as in the UK, and as for hedge funds their leverage was one-twentieth that of the investment banks. And where have ordinary investors lost most money? The answer is in French mutual funds which turned out to be exposed to Madoff, and in German structured certificates exposed to Lehman's. Not in the so-called Anglo-Saxon economies."

Mr. Saunders went on to comment that not enough is being done to counter the misrepresentation. He said:

"There is a real need for the UK political class to engage more effectively with our friends and partners in the European Union."

Observing that the crisis is a banking crisis Mr. Saunders noted that policymakers have been proposing new regulation for asset managers, particularly for hedge funds. He commented:

".......it strongly suggests that the reactions are being driven not by considered analysis but instead by a politically driven desire to place the blame at the door of the hedge funds. This is very odd when you consider its size compared with the traditional investment management industry - the UK industry alone is about twice the size of the global hedge fund industry. It says a lot about the poor quality of policy making at the moment."

Mr. Saunders ended his speech by broadly welcoming proposals to give CESR more powers, leading to rationalisation of regulation and allowing asset managers to operate in a truly pan-European way. Mr Saunders also reminded the audience of the issues surrounding the current draft Alternative Investment Managers Directive (AIFM) and strongly urged that substantial revisions be made to it.

-ENDS-

---

Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to ePolitix.com. We promote their parliamentary and political campaigning activities as they are subscribers to the ePolitix.com service.

As such, ePolitix.com does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.