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Jon Moulton on the private equity bubble: ‘One company going bust could spark domino effect’

Current debt structures are similar to those used in ‘subprime crisis’, buyout veteran says

Banks will have to start turning over more information about their links to private equity as Threadneedle Street tries to get a grip on the risks involved
Banks will have to start turning over more information about their links to private equity as Threadneedle Street tries to get a grip on the risks involved Photo: Mike Kemp/Getty Images

The Bank of England is right to be concerned about a private equity bubble, one of the City’s best-known turnaround specialists Jon Moulton has said.

In a letter to UK lenders’ chief risk officers on 23 April, Bank executive Rebecca Jackson warned that banks are underestimating the exposure they could have to the £6.5tn private equity industry.

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