By Martin Banks - 15th October 2008
Regulation should be done on a country-by-country basis. There should not be a one-size-fits-all approach
British venture capital association's Simon Walker arguing against EU-wide financial regulation
A British private equity group has cautioned against what many see as a likely wave of EU-wide regulation in the wake of the current banking turmoil.
Simon Walker, chairman of the British venture capital association, said his fear was that too much legislation would be introduced which, in turn, would stifle sources of capital.
He told a Brussels Network meeting organised by MEPs Syed Kamall and Alexander Graf Lambsdorff, “My concern is that a wave of EU-wide legislation will come out of the current turmoil. Rather than this happen, regulation should be done on a country-by-country basis.
“There should not be a one-size-fits-all approach.”
His comments come after parliament recently adopted a report by Danish Socialist MEP Poul Nyrup Rasmussen, which calls for EU legislation to force private equity groups and hedge funds to disclose unprecedented amounts of information about their activities.
Rasmussen, a former Danish prime minister, drew up the report, demanding what he calls “better regulation to isolate the bad guys”.
Its adoption has led to some European venture capitalists warning that legislation could promote economic stagnation.
Walker, whose association represents private equity and venture capital in the UK, also defended his industry against accusations of blame for the crisis.
He said private equity had “rescued rather than wrecked” many companies that fall on hard times.
"It is very important to differentiate private equity from hedge funds and banks because they are quite different.
“Private equity people put their own wealth at stake - they gamble with their own money rather than someone else's.
“It is worth noting that the 32 largest private equity groups in the UKall comply with self-imposed transparency guideline requirements.
“Let's be clear - the private equity sector should not be blamed for the turmoil. It is the regulated elements of the financial sector, such as the banks, which are the source of the problem.”
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