Speaking yesterday on the European Commission’s Communication on the de Larosière report which outlines a framework for financial supervision in the EU, Saunders said problems in continental European banks had been at least as bad as in the UK.
He said: “As for hedge funds their leverage was one-twentieth that of the investment banks. And where have ordinary investors lost most money? The answer is in French mutual funds which turned out to be exposed to Madoff, and in German structured certificates exposed to Lehman’s. Not in the so-called Anglo-Saxon economies.”
Saunders said not enough is being done to counter the misrepresentation.
He said: “There is a real need for the UK political class to engage more effectively with our friends and partners in the European Union.”
He noted policymakers have been proposing new regulation for asset managers, particularly for hedge funds and said: “it strongly suggests that the reactions 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.”