The private equity and venture capital industry in Europe could be "seriously compromised" if the Basel II accord, the new capital adequacy programme, is passed, the European Private Equity and Venture Capital Association (EVCA) has warned.

The trade body has issued a statement objecting to the accord, which will force banks to set aside capital based on an assessment of their exposure to operational risk. The EVCA said the suggested risk weightings may scupper the positive potential of exposure to private equity and venture capital, as the industry relies heavily on investments from banks.