British Politician Blasts ‘Hedge Fund Speculators’

Sep 18 2008 | 9:15am ET

Britain’s third party is continuing its populist assault on hedge funds.

Vince Cable, the Liberal Democrat’s spokesman on economic issues, blasted “hedge fund speculators” for their role in forcing British bank HBOS into merger talks with Lloyds. He also called on the Financial Services authority to bar hedge funds from “hunting in packs.”

“It is shocking to see a major British bank brought to its knees by hedge fund speculators engaged in ‘short selling,’” Cable said in a statement. “They were only able to speculate because they knew HBOS had a government guarantee and would be bailed out by the taxpayer.”

“Who is next? It looks as if they may now be turning their attention to other banks.”

Cable said the government and FSA need to take steps to restrict short-selling by hedge funds.

“The FSA must insist that hedge funds declare their position,” he said. “It must also outlaw collusion between the hedge funds because they are now hunting in packs.”

At the party’s annual conference this week, party leader Nick Clegg pushed for the closing of a pair of tax loopholes benefiting hedge fund managers and other wealthy Britons. He called the fact that some hedge fund managers pay less in tax than their cleaners a “grotesque spectacle.”

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