Telegraph.co.uk – The City is staring into the abyss. If the proposed EU directive on hedge funds goes through, London will go the way of Bruges, Venice and Amsterdam: a once dominant financial entrepôt sidelined by more virile cities.

This, of course, is precisely what some in the EU want. I have lost count of how often I’ve heard voices raised in Brussels against London’s “jungle capitalism”. In the eyes of many Continental politicians, the Square Mile is parasitical: a lawless free city, whose lax regulations caused the financial crisis. They deeply resent the fact that 80 per cent of managed equity and hedge funds are based in London.

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Tags: abyss, amsterdam, bruges, brussels, capitalism, entrep, financial crisis, hedge funds, jungle, london, politicians, rsquo, telegraph, venice, voices

Reuters – Investors who bought protection against a Lehman Brothers default in the credit default swaps market have little to worry about getting paid on Tuesday, when an estimated $8 billion in cash payments on Lehman CDS come due.

While these payments may push a few fragile hedge funds over the edge, analysts say, stringent collateral requirements mean most protection buyers will not be out of pocket.

Comment has circulated in the markets and in the media that CDS counterparties may not be able to come up with the cash.

"The big issue is whether they (CDS) will be settled successfully," wrote ING rate strategist Padraic Garvey on Friday. "The talk is that hedge funds sold protection on Lehman … well now they will have to cough up."

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Tags: five-men, investment-arm, lehman-brothers-holdings, loans, medallion, redemption-requests, soren, venice