Treasury Secretary Timothy Geithner
US Treasury Secretary Timothy Geithner wrote to the European Commission to warn it that regulating hedge funds and private equity firms may amount to discriminating against US companies, the Financial Times reported Thursday.
European Union officials are mulling plans to regulate hedge funds and private equity firms, which Greek officials said bear part of the blame for the country's debt crisis because they speculated on its debt.
Some analysts also said that by placing bets that a country is likely to default, hedge funds destabilize markets.
Geithner sent a letter this month to Michel Barnier, the European Union's commissioner on internal markets, warning of a clash with the US if the Commission goes ahead with a law that Washington fears could be protectionist, the Financial Times wrote on its Web site.
He warned that proposals to limit the access of investors in the EU to funds based outside the bloc could amount to discrimination against US companies, the paper said.
It said an EU directive might force private equity firms and hedge funds in the European Union to use only banks based in the 27-country bloc as custodians and depositaries.
The European Commission said the planned hedge fund rules are not discriminating against foreign entities and are not protectionist Reuters reported.
It said Barnier will go to Washington in the coming weeks to discuss the rules.
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