Hedge funds and Private Equity - PES
Hedge funds and Private Equity - PES
Hedge funds and Private Equity - PES
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Transparency <strong>and</strong> disclosure are simply preconditions – but not sufficient conditions to ensure<br />
positive solutions to our concerns as explained in part II.<br />
When considering – better – regulation of alternative investment it would help to answer the<br />
following questions in detail:<br />
How to make sure to only attract desired investment<br />
<strong>and</strong> ward off unwelcome financing?<br />
Investors<br />
Investor Protection<br />
Balancing<br />
Longterm Interests<br />
Stakeholders<br />
Functioning of financial markets<br />
Employee protection/participation<br />
Debtor protection<br />
Social impacts of risky investments<br />
Companies<br />
Good Corp Governance<br />
1) How do we ensure long-term investments to promote our goals, the Lisbon strategy <strong>and</strong> New<br />
Social Europe?<br />
2) How do we avoid a clash between short-term financing <strong>and</strong> long-term investment needs in the<br />
real economy as a part of our efforts to make European companies compete globally on the<br />
basis of our common values?<br />
3) How can we ensure financial stability <strong>and</strong> eliminate systemic risk?<br />
4) How would European regulation reach investors, whether institutional or private, who have<br />
their company <strong>and</strong> business base outside the EU, as is often the case in the area of hedge<br />
<strong>funds</strong> <strong>and</strong> private equity? Is there a basis for an agreement encompassing the whole of<br />
Europe on how companies with this form of alternative investment can be h<strong>and</strong>led?<br />
The optimal solution would be to have regulation internationally, at the highest level possible.<br />
A case could be made for regulation of the risk management system through the Bank for<br />
International Settlements in Switzerl<strong>and</strong> – the ‘Central Bank of the Central Banks’, under<br />
whose auspices the Basel Capital Adequacy Agreements were reached. The case could be<br />
made that, even though the alternative investment fund might be registered offshore, the<br />
manager is (i) raising money in <strong>and</strong> (ii) investing in Europe <strong>and</strong> (iii) therefore potentially posing<br />
a danger to the stability of the European financial system.<br />
5) To what extent can employees’ social rights be called into play for the socially acceptable<br />
regulation of alternative investment?<br />
Part III – Lessons to be drawn for future regulation<br />
157
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