The European Private Equity and Venture Capital Association (EVCA) has warned the Basel Committee that its proposed reform of banks' capital adequacy rules could reduce flows of capital to private equity funds by between €5bn and €10bn ($5.5bn to $11bn) a year.

The EVCA has written to the Basel Committee urging it to relax the proposed rules relating to banks' private equity investments. Javier Echarri, secretary general of the EVCA, said: "The current Basel II draft could lead to a significant retreat by banks from private equity and venture capital funds. We believe the impact is far bigger than people think."