Independent: FSA alarmed by leverage in buyouts

The City watchdog yesterday voiced fresh concern about potential market abuse by private equity firms and the "excessive level" of borrowing they use to buy out public companies.

In a report released just a day before the Treasury Select Committee begins an inquiry into the increasingly controversial industry, the Financial Services Authority said it believed its statutory objectives were at risk from both.

But it stopped short of imposing new rules, preferring instead to increase the supervision of private equity companies and the banks that lend to them.