In a volte face, the Church of England, which had labelled short sellers as "bank robbers" and appealed to the UK's bankers to repent for their role in the global economic crisis, has come out in defense of wealth fund managers realising that a proposed  EU directive could hurt the Church's £19.5-billion endowment fund.

In a letter to the House of Lords' European Union select committee, the Church commissioners said they had serious concerns regarding the proposed directive to regulate hedge funds.

The letter said, "We are concerned that the directive as currently drafted will significantly restrict our ability to generate funds to pursue our charitable missions and thus reduce our impact for public good."

The European Union select committee had proposed that European hedge funds should be restricted from conducting business outside of the EU, which implifies that a London-based hedge fund would be restricted from investing in a US-based fund.

This is because the Brussels-based European Union feels that it cannot safeguard the interest of investors in funds outside of the EU since they are not as tightly regulated as in Europe.

The German Chancellor Angela Merkel and President Sarkozy of France have said that hedge funds had made the global financial crisis more severe and had called for tighter regulations to oversee and limit their trading.