The European Central Bank is only the latest body to criticise proposed European regulation of alternative assets, such as hedge funds and private equity. But compared with other voices, such as the UK’s financial regulator or Sweden, the current European Union president, the ECB is an impartial arbiter.

The UK, worried about the rules’ impact on its position as King of European finance, opposes them. France, which seeks the crown, supports them. The ECB looks further afield. It knows that rules need to be globally harmonised to avoid regulatory arbitrage. It also recognises that “shadow banks” are a key source of credit when normal banks cannot or will not lend. The European Commission itself now admits the proposals need to be redrafted. Hedge funds have Frankfurt to thank for that.