Simon Walker: EU must heed expert advice on regulation
SIMON Walker, chief executive of the British Private Equity Association (BVCA), has urged European policymakers to pay attention to recent reports from top-rank regulation experts and leave private equity out of their financial rules crackdown.
Walker said comments in an EU financial regulatory report by Jacques de Larosière and by Sir James Sassoon, who wrote a rules reform report for UK shadow chancellor George Osborne, both clearly explain why private equity should be left out of the crackdown.
He said the “clear logic” of their remarks is that the EU should leave private equity out of proposed directive on regulation, currently in a consultation phase.
“These are merely the latest distinguished experts to agree that the directive as its stands is fundamentally flawed,” he said.
Currently private equity funds over a certain size are facing rules on how they report to regulators and possible liquidity controls, which could damage their ability to generate growth even though they are not blamed with contributing to the credit crunch.
“This would do immense damage to private equity at precisely the moment when it could and should be at the centre of a European economic recovery strategy,” added Walker
Recently de Larosière said that “private equity should be kept out of heavy regulation” and Sir James added “it is hard to find a kind word to say about a directive so disproportionate in scope, so protectionist in its effect and so poorly drafted”.
Meanwhile, Walker said the BVCA has been able to secure a £150m government fund to boost struggling venture capital funds, stating the fund could scale up to £1bn over time with private investment.