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BORIS: I'M CITY'S NEW CHAMPION

LONDON Mayor Boris Johnson yesterday took the fight to save the City to Brussels, where he lobbied EU officials over plans to crack down on hedge funds, private equity houses and the alternative investment sector.<br /><br />Johnson met with various MEPs and Charlie McCreevy, the EU&rsquo;s internal markets commissioner, to highlight the problems contained within the new European draft directive on alternative investment fund managers (AIFMs).<br /><br />He said: &ldquo;The directive as it is currently drafted will have enormously damaging consequences for London, for the UK, and for Europe too. There is no suggestion or evidence that investment funds were in any way to blame for the financial crisis and it is difficult to see the justification for this level of regulation.&rdquo;<br /><br />The directive, published by the European Commission in April, contains proposals to force the alternative investment industry to adhere to a burdensome disclosure regime, alongside plans to place limits on leverage, introduce minimum capital requirements and make it more difficult for non-EU domiciled investors to participate in the EU market.<br /><br />The UK, where around 80 per cent of Europe&rsquo;s hedge funds are situated, has strongly opposed the directive, arguing that it will hamper London&rsquo;s competitiveness as an international financial centre.<br /><br />Johnson, who said it was his job &ldquo;to be the champion of the City&rdquo;, said real progress had been made over the course of the trip, although there is very little he can do to stop the directive from being passed into law.<br /><br />&ldquo;There&rsquo;s a real understanding, particularly in the commission and also in the parliament, about some of the problems this directive poses, and I think there&rsquo;s a great willingness to engage with London and the UK government to try and improve it,&rdquo; he told City A.M.<br /><br />The Mayor also hit out at proposals from French finance minister Christine Lagarde which would see mandatory caps on banking bonuses. The suggestions were being discussed by EU finance ministers in Brussels yesterday.<br /><br />&ldquo;In my opinion it would be difficult to devise a satisfactory system of capping bonuses for bankers. It is only too easy for banks and other firms to redesignate forms of remuneration that were previously bonuses as salary,&rdquo; he said.<br /><br />The Mayor was joined on his Brussels lobbying mission yesterday by Stuart Fraser, the chairman of the policy and resources committee at the City of London Corporation.<br /><br />&ldquo;There is a need for more transparency within hedge funds... but we do not believe that the industry constitutes a systemic risk,&rdquo; said Fraser.