Possible EU reforms slammed by investment expert

Future European regulation of funds should not be based on national politics, the head of the Investment Management Association (IMA) has said.

Richard Saunders signalled concern that the EU could cause damage in cracking down on hedge funds - and suggested that they were being blamed for the financial crisis and economic downturn.

The IMA chief executive also launched a staunch defence of the ’Anglo Saxon’ economic model, pointing out that the current downturn was ’at least as bad’ in the eurozone than it is in Britain.

Mr Saunders commented: ’The [pressures for reforms] are being driven not by considered analysis but instead by a politically driven desire to place the blame at the door of the hedge funds.

’This is very odd when you consider its size compared with the traditional investment management industry - the UK industry alone is about twice the size of the global hedge fund industry.’

He added: ’It says a lot about the poor quality of policy making at the moment.’

Competitive devaluation of the pound, along with an apparent turnaround in the property market and surprisingly strong retail sector performance, have raised hopes that the recession could soon come to an end in the UK.ADNFCR-2318-ID-19225267-ADNFCR