Pandora's box

The R-word has finally been spoken and is claiming its first victims. Though it was imminent, it has nevertheless further depressed consumer confidence. What is worse, how bad the hangover will be remains uncertain.

An industry specialist recently said that private equity was one of the keys to recovery. It can fill the gap that a lack of leverage has left; indeed fundraising remains buoyant. And where fears of short-termism pervade, private equity can bring long-term vision to foster growth. Finally, private equity can generate interesting returns for pension funds hard hit by banks in difficulty.

Whether private equity will prove a panacea remains to be seen. After all, just like other players in the financial sector, private equity is coming under pressure, and increased regulation is an inherently real threat. Certainly, self-regulation in the UK has had a positive influence in other European countries. Denmark, Sweden, France and Germany have, to some degree been inspired by the Walker Report and ensuing guidelines. But will this suffice?

The morbid fascination that comes from observing a crisis unfold before your eyes is met with the mixed feelings that come when the news is delivered.

There is always hope. It was, after all, the last thing to come out of Pandora's Box.

Yours sincerely,

Francinia Protti-Alvarez, Editor, Benelux unquote", Tel: +44 20 7004 7475, Francinia.protti-alvarez@incisivemedia.com.

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