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EU market chief to denounce credit `ugliness`, caution against a rush to regulate
From the FT: Reckless investment practices and bad liquidity management contributed to the global credit market crisis but rigid transparency rules are not the right answer, Charlie McCreevy, the European internal market commissioner, will warn on Friday.
In a speech in Dublin, Mr McCreevy will denounce the “irresponsible lending, blind investing, bad liquidity management, excessive stretching of rating agency brands and defective value at risk modelling” that prompted the turmoil of recent months…
However, the commissioner, one of the EU’s most prominent exponents of free-market thinking, will caution against a rush to regulate, saying rules that enforce transparency in financial markets can sometimes backfire, spreading panic and moral hazard across the system… Full article:
Source
Opalesque Exclusive: BoE says no outflows from hedge funds due to subprime, hedge funds were stabilizing markets
From the BoE stability report: Hedge funds have been key investors in structured credit
markets over the past few years. In a few cases during the
recent period of market turbulence, deleveraging by hedge
funds to meet margin calls appears to have resulted in
distressed sales of assets or in the closure of funds to
withdrawals to avoid distressed sales.
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