A group of large US hedge funds has called on the Bank of England to intervene to free an estimated $65bn in assets frozen in London in the collapse of Lehman Brothers.They warned that the scale of the problem was so great that it could undermine bank rescue plans as tens of billions of dollars would be kept out of the market. It was also likely to lead to the failure of some fund managers, said Richard Baker, chief executive of the Managed Funds Association (MFA).
Billions of dollars of assets have been shifted out of London to the US amid claims that the US legal system provides greater protection.
??Prime brokerage clients are already withdrawing their assets from the UK prime brokers/UK branches of overseas prime brokers,? Mr Baker wrote in a letter to Mervyn King, governor of the Bank. ??This development is calling into question the future of the UK prime brokerage market.?
