Financial Regulatory Forum

Some hedge funds eager for Irish “No” on EU treaty – Finance Minister Lenihan

By Reuters Staff
September 28, 2009

Ireland's Finance Minister Brian Lenihan talks to France's Economy Minister Christine Lagarde (R) at the start of a Euro zone finance ministers meeting in Brussels, March 9, 2009.  REUTERS/Francois Lenoir   (BELGIUM BUSINESS POLITICS) DUBLIN, Sept 28 (Reuters) – Hedge funds which bet unsuccessfully that Ireland would default on its sovereign debt want the country to reject the EU’s reform treaty this week to recoup some of their losses, Finance Minister Brian Lenihan said on Monday.

Irish credit default swaps, financial derivatives which offer insurance against the government defaulting, have plunged in recent months as Dublin tackled its fiscal and banking crises, easing concerns of an Icelandic-style implosion.

Lenihan said that a “No” vote in Friday’s referendum on the European Union’s Lisbon Treaty would shake Ireland’s international reputation, raising its borrowing costs. Hedge funds which were losing out on the fall in Irish CDSs wanted such a result, he added.

“Quite a number of these hedge funds have taken out specific bets on CDS, on the insolvency of Ireland, and clearly they see a ‘No’ vote as assisting a bet which is now failing,” he told a news conference.

Five year Irish CDSs have dropped to 136.5 basis points from a record 385 basis points earlier this year.

Politicians across Europe have accused hedge funds of exacerbating the global financial crisis, and G20 leaders agreed last week that those above a certain size should be authorised and obliged to report data to supervisors.

Irish voters rejected the Lisbon Treaty last year, shelving the EU’s foreign policy ambitions. Opinion polls show a majority now support the treaty, which needs to be ratified in the second Irish referendum for it to take effect across the 27-member bloc.

Comments
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Pleace vote for democracy and against the treaty of lisbon

Dear irish people!

Pleace stop the treaty of lisbon! Is is antidemocartic, militaristic, antisocial. The disadvantages are much bigger, than the advantages. The EU can live with its actuell laws. They should only be changed into a democratic direction. With the treaty of lisbon, the european council is able to change this treaty in great parts without asking the parliament. This is nearly the same law, which mades the nationl- rassistic- party of Germany so powerfull in our country in the year 1933. Our basic law (the german constitution) and all other european constitutions should not be replaced by the treaty of lisbon. But the new treaty tries to bring all right- sytstems in a lower level than the new european right. Here is my informationpage: http://sites.google.com/site/euradevormw ald/english . When you have some more english information, pleace send me a link or text or write it into the visitors book of my page. And pleace spread this text all over Ireland.

In the hope in your activities for a better Europe, Felix Staratschek, Freiligrathstr. 2, D- 42477 Radevormwald (Germany)

 

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