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Darling backs hedge funds

CHANCELLOR Alistair Darling yesterday vowed to fight EU plans to clamp down on the hedge fund and private equity industries, warning that excessive red tape could push top talent out of Europe. <br /><br />He told an audience of senior figures from the financial industry: &ldquo;Hedge funds have had a pretty bad press, and they were in the dock even before bankers and politicians. There are some in the European Commission who don&rsquo;t fully understand the function of hedge funds, and it would be a pity if we ended up in a situation where we simply drove hedge funds out of Europe.&rdquo;<br /><br />Among the more extreme suggestions being examined by the EU are tough caps on remuneration and leverage.<br /><br />The chancellor also tried to convince the audience at the Wall Street Journal&rsquo;s Future of Finance Initiative that he supported the City. He said: &ldquo;My starting point is that the financial services industry is important and essential. We have many banks and institutions here which are not British, but which choose to be here. I&rsquo;m determined that we do not undermine that.&rdquo;<br /><br />Meanwhile, Darling said that the government would try to reduce the deficit, but that it would be dangerous to narrow it too quickly. &ldquo;It&rsquo;s always a judgement as to how fast you can redraw the deficit. I would rather be found guilty of removing the support facilities slightly too late than slightly too early,&rdquo; he said.<br />