New Japanese Finance Minister Bears Teeth Against ‘Piranhas’

Sep 6 2007 | 7:48am ET

Leaving locusts to the Germans, Japan’s new financial services minister has coined a new epithet for rogue hedge funds: piranhas. Luckily for hedge funds, however, that’s where the similarities end.

Yoshimi Watanabe told the Foreign Correspondents’ Club of Japan that he hopes to put out the welcome mat for foreign investors, including hedge funds, making the country’s markets “a pond where fish from overseas could swim.” But he warned that his hospitality has limits.

“We would not make the pond a place where no fish can live (due to strict regulations), and will provide enough plankton and food to draw the fish,” he said, extending the tenuous metaphor. “However, when the piranhas happen to come, we have to take them out.”

Japan’s new financial regulations, which include closer scrutiny for hedge funds, come into effect at the end of the month. And Watanabe warns that the country’s Financial Services Agency will be on the lookout for predators.

Regulators “cannot judge whether hedge funds are piranhas until we see their teeth,” he said. “Those who break compliance rules will be considered piranhas, and those who do not do so will not be considered as such.”


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of