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The EU Proposals for The Regulation of Alternative Investments
Author(s) -
Copeland Laurence
Publication year - 2012
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2012.02171.x
Subject(s) - variety (cybernetics) , competition (biology) , business , investment (military) , compliance (psychology) , economics , finance , public economics , political science , psychology , ecology , social psychology , artificial intelligence , politics , computer science , law , biology
The EU proposals for regulating so‐called alternative investment funds ( AIFs ) are intended to give investors more protection and to mitigate risks to the rest of the financial system, while further integrating markets inside the EU . Unfortunately, many of the provisions seem more likely to achieve the opposite of what is intended, reducing competition, reducing investor choice and increasing systemic risk. They also involve significant compliance costs. The proposals for regulating credit rating agencies seem unnecessary and are likely to be counterproductive. It would be far better to allow free competition by agencies of all kinds operating under a variety of different funding models.