BusinessCompany NewsPrivate equity crash could hit shares

Private equity crash could hit shares

Bank of England warns that changes to buyout market would hurt stock markets

A disruption to the activity of private equity firms could cause significant
damage to stock markets, the Bank of England has warned.

According to City A.M., the Bank said that its market contacts had
revealed that trading in the shares of listed companies was vulnerable to a
slump in buyout activity.

The warning follows months of lobbying by unions and left-wing politicians
for a complete restructuring of the way in which private equity operates.

Opposition to the industry has centred around the fact that private equity
enjoys tax advantages because of the way deals are structured, with unions
saying that private equity bosses do not pay enough tax on their emoluments.

‘In the event of a significant disturbance to financial asset markets, there
is uncertainty surrounding how the shock would be transmitted through the
financial system,’ the Bank said.

The Bank also pointed out that less onerous loan covenants increased the risk
of a collapse in private equity deals.

Further reading:

Private equity bosses ‘will bow to tax rises’

Brown to offer foreign subsidiary tax breaks

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor