11 OCT 2010
By Mark Deen | Bloomberg
French Finance Minister Christine Lagarde said any “passport” that would license funds and investment vehicles from outside the European Union to operate in all the region’s 27 countries should be granted by an EU authority rather than national regulators.
“France believes that such a passport should be truly European,” Lagarde said in a letter to U.S. Treasury Secretary Timothy F. Geithner that was obtained by Bloomberg News.
Geithner told Lagarde and her European counterparts that current French proposals for EU investment rules would discriminate against foreign investment firms. In an Oct. 5 letter, Geithner urged France to back a plan that would allow foreign hedge funds and private equity firms that were cleared to operate in one of the EU’s countries to do business in all of them.
French President Nicolas Sarkozy’s government is concerned that allowing individual EU countries to grant non-European funds and investment managers the right to operate throughout the region might spur a regulatory race to the bottom as smaller nations seek financial businesses and jobs.
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