The FSA have finally released their report into Private Equity buy-outs today. A good article on this is in today's Times (here).
I blogged 2 months ago on the crisis that is brewing in this industry, with companies abusing the market by lending at unsustainable levels to corporates and then selling off their risk piecemeal.
As usual, little mention of any consequences of corporate defaults in the FSA report. The Boys at North Colonnade are worried about the effect on fellow city workers; the jobs and pensions at the affected companies are hardly mentioned. Even Robert Coles column on this in the Times today barely mentions the real world.
The FSA also downplays any systemic risk from the collapse of one of the big LBO's (the lenders). No surprise there then; the FSA never thinks there are any major risks in the financial markets that it regulates.
Cityunslicker predicts the demise of the mad Private Equity lending rush in the next year will be one of two catalysts to next years' recession; the other being the more well understood consumer credit crunch.