EU finance ministers rein in hedge funds

European finance ministers reached a breakthrough agreement on regulating the hedge funds industry on Tuesday.

"The big change is that at European level there was no regulation and no supervision, and now there will be one," the EU's market regulation commissioner, Michel Barnier, said in Luxembourg. The EU is seeking greater transparency from hedge funds. Some argue that hedge funds contributed to the 2008 financial crash due to destabilizing moves on the markets.

The new regulations would require each hedge fund to obtain a "passport" in order to have access to the European market. This license would be issued by the European Securities and Markets Agency (ESMA), a new EU watchdog based in Paris, which is to start work next year.

For more: EU finance ministers rein in hedge funds | Europe | Deutsche Welle | 19.10.2010