Geithner urges Europe to treat U.S. funds equally
WASHINGTON, April 6
WASHINGTON, April 6 (Reuters) - U.S. Treasury Secretary Timothy Geithner has urged his counterparts in key European capitals to prevent Europe from discriminating against U.S. fund managers in the course of setting new rules for hedge funds and private equity investors.
Treasury officials made public a letter from Geithner on Tuesday night in India, where Geithner is on an official visit, after its contents were reported on Tuesday morning in the Financial Times newspaper. The letter is dated April 5.
"I understand that the draft ... would discriminate against third country funds and fund managers by denying them the opportunity to access the European Union single market via a passport approach, which would be limited solely to funds and fund managers," Geithner wrote to British Chancellor of the Exchequer Alistair Darling.
Copies of the letter also went to French Finance Minister Christine Lagarde, German Finance Minister Wolfgang Schauble and Spanish Finance Minister Elena Salgado.
The U.S. Treasury chief said he hoped the proposal would be "revised to provide non-EU funds, fund managers and global custodians the same access as their EU counterparts and promote a single market."
Geithner said the Obama administration was working on strengthening regulation and oversight of hedge funds as part of its financial regulatory overhaul and said there was no attempt in U.S. efforts to discriminate in rule-making by national origin.
"Our regime will treat all advisers and funds operating in the US equally regardless of their origin -- domestic or non-US," he said, adding that he hoped U.S. and European officials could "work together constructively" on efforts to tighten the rules under which hedge funds operate.
European officials, especially in Germany and France, have long complained that lack of transparency about the big bets that hedge funds typically take adds to financial market instability and needs to be brought under stricter supervision.
Geithner is in India until Thursday. He meets finance ministers from Group of 20 countries in Washington later this month on the fringes of scheduled semi-annual meetings of the International Monetary Fund and World Bank where efforts to get the global economy back onto a sounder, better-regulated footing after the 2007-2009 financial crisis top the agenda. (Reporting by Glenn Somerville; Editing by Gary Hill)