EU finance ministers have decided to require greater transparency and regulations of hedge funds, despite (also here):

EU finance ministers have agreed a common position on draft EU legislation on managers of hedge funds and other alternative investment firms, opening the door for negotiations with the European Parliament, the co-legislator.

The agreement on Tuesday (18 May) comes despite UK concerns that the Europe-wide law could negatively impact the British economy, with 80 percent of hedge funds currently located in London.

I would note that one of the myths here is that hedge funds and other highly speculative activities benefit the economy as a whole.

They don’t. They suck productive intellect and capital into purely speculative activities, and this makes everyone but the hedgies and bankers poorer.

The US has been fighting this tooth and nail, and claiming that this is protectionism in violation of WTO rules, but I agree with Yves at naked capitalism on what this is really about: “

Yves again. Did you catch that? Look at what the Europeans want: to regulate hedge and PE funds, as in prevent them from engaging in behavior proven to be dangerous (abuse leverage) and give investors more disclosure, and restrict firms that refuse to agree to play by those rules. That is hardly a radical agenda, yet Treasury Department is working in lockstep with the industry to defend its ability to operate with minimal constraints. And note that no one is mounting an argument that these businesses are socially productive and hurting them will hurt the economy because no such argument can be made credibly. Instead, an effort to impose “prudent regulation” is begin branded as “discrimination.” The problem is no one outside the industry will buy the argument. And Team Obama’s zealous defense of these firms again reveals how, despite its efforts to present a populist, pro-reform image, that it will never cross its best friends, the big financiers, in a serious way.

With members of Congress realizing that the political backlash from being easy on the banks completely overwhelming any amount of campaign donations that the finance industry can generate, which is why the Senate finance reform bill is getting better, it’s time for Barack and His Evil Minions^™ to realize that their political future is connected to taking down the banks.