Little Backing For Obama Plan In Europe

Jan 25 2010 | 3:19pm ET

The Europeans are saying all the right things about President Barack Obama’s plan to keep banks out of the alternative investments industry. But they aren’t saying they’ll follow suit.

Some officials in France, Britain and Germany have offered cautious support for Obama’s proposals. Others have said thanks, but no thanks.

“In the American circumstances, it may be necessary for the private-equity and hedge-fund work to be separated,” British Prime Minister Gordon Brown said today. “We don’t have that issue here.” Alistair Darling, the chancellor of the exchequer, said that Obama’s rules would not have prevented the financial crisis.

In fact, one European Union source explicitly says the 27-nation bloc won’t be following the U.S. in imposing drastic limits on bank trading.

“Look, we understand the U.S. position and we understand his reasons. But I can’t see the EU going down this route,” the source told Reuters. “The U.S. finds itself a little behind us on this. The Obama plan is not fit for purpose in the EU.”

The source dismissed the Obama plans as “back to the future” and “anti-competitive.”

Obama’s plan is getting rather more full-throated support from one unexpected corner: Britain’s opposition Conservative Party.

“This is a welcome move by President Obama that accords very much with our thinking,” George Osborne, in line to get Chancellor Darling’s job should the right-leaning Tories win this years elections, said of the left-leaning president’s proposals. “I have said consistently that we should look at separating retail banking from activities like large-scale proprietary trading and that this was best done internationally.”

Which is not to say that all Tories are convinced: The mayor of Europe’s main hedge fund and financial center, London, said through his spokesman that he would “need to be convinced.”

“It is hard to know what he means when he says he wants to stop retain banks doing proprietary trading ‘unless it is necessary for customer services,’” Boris Johnson said. “That seems like a large loophole.”


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.