Eurocrats’ hackles have been raised in Brussels all week – not least because of this:
The above is a letter sent by US Treasury Secretary Tim Geithner to Michel Barnier, the newly installed EU Internal Markets Commissioner, concerning the controversial AIFM directive and obtained exclusively by the Financial Times.
Geithner makes it fairly clear that many elements of the directive are no-go areas for the US. The main issue is that of equivalence: under the current draft being debated by the EU council, in order to sell to EU investors, non-EU (i.e. US/Cayman) hedge funds will need to show they comply with rules equivalent in nature to those of the EU.
Note the thinly-veiled threat in Mr Geithner’s letter:
We are concerned with various proposals that would discriminate against US firms and deny them access to the EU market that they currently have. We strongly hope that the rules that you will put in place will ensure that non-EU fund managers and global custodian banks have the same access as their EU counterparts. You will see that our approach in the US maintains full access for EU fund managers and custodians to our market.
Full access – for now…