A series of financial crises involving hedge funds has created a general perception that action needs to be taken. A number of key member states and political actors favour tighter regulation. Traditional bureaucratic theory suggests that the European Commission would seek to maximise this ‘policy window’, and yet there remains no single unified European Union (EU) regulatory framework specifically targeting hedge funds. The nature of the regulatory regime, which has generally demanded a ‘light touch’ approach, means there are strict limits the EU’s ability to act. From an EU perspective, hedge fund regulation appears to be a policy cul-de-sac. However, the relationship between hedge funds and financial crisis is complex and less straightforward than is often portrayed. Hedge fund regulation cannot, however, be considered in isolation but should be viewed in the context of a wider programme to integrate European financial services markets. Viewed from this perspective, EU regulation is in fact changing the landscape of the hedge fund industry through a process of negative integration.
hedge funds, institutionalism, financial services, European Commission
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.Material published in the JCER is done so under a CC BY-NC-ND 4.0 licence, with copyright remaining with the author.
- Articles published online in the JCER cannot be published in another journal without explicit approval of the JCER editor.
- Authors can 'self-archive' their articles in digital form on their personal homepages, funder repositories or their institutions' archives provided that they link back to the original source on the JCER website. Authors can archive pre-print, post-print or the publisher's version of their work.
- Authors agree that submitted articles to the JCER will be submitted to various abstracting, indexing and archiving services as selected by the JCER.