UPDATE 1-Banque de France sees no credit crunch in Europe

(Combines stories, updates with more comments, background)

By Huw Jones

BRUSSELS, April 8 (Reuters) - There is no credit crunch in Europe and the International Monetary Fund has been too pessimistic in its growth forecasts for the region, a senior Banque de France official said on Tuesday.

"Today in Europe there is no credit crunch," Jean-Pierre Landau, second deputy governor of Banque de France, told a European Parliament hearing on hedge funds and private equity.

Landau, speaking in a personal capacity, said the IMF growth forecasts for the euro zone and Europe were too pessimistic as they had taken into account risk from financial market turmoil.

"That should have been dealt with ... separately," Landau told the EU assembly's economic affairs committee.

The IMF has cut its estimate of euro zone 2008 economic growth, a source familiar with the matter told Reuters last week.

The IMF will say on April 9 that it now forecasts the economy of the countries using the euro to grow less than 1.3 percent this year, down from a previous forecast of 1.8 percent published in January, the source said.

Attempts through the use of securitisation to spread risk throughout the market in recent years have turned out less effective than thought and it has ended up concentrated in big banks, Landau said.

Landau said the current crisis should not lead to any final views on securitisation and the role of hedge funds as securitisation had been successfully used for decades.

Several EU lawmakers say hedge funds and private equity are too lightly regulated and may have contributed to the financial turmoil. Labour unions accuse private equity groups of sucking companies dry of capital.

Britain's top market watchdog said hedge fund supervision needed no big changes.

"Hedge funds are neither catalysts or drivers of current market turmoil," Dan Waters, director of retail policy at the UK Financial Services Authority, said.

"The indirect approach of supervision to hedge funds is the appropriate and cost effective one," Waters said.

Hedge funds are supervised indirectly through their prime brokers, the big investment banks that supply capital.

Hermes Equity Ownership Services, which operates a pension fund for UK telecoms group BT (BT.L), said hedge funds were as much a victim as a perpetrator of the current market turmoil.