Private equity firms that used high leverage to make buyouts in the mid-2000s now present a threat to the UK financial system, an article in the Bank of England's latest quarterly report warns.

David Gregory, the author of Private equity and financial stability, says firms may begin to struggle as their debt reaches maturity, as financial conditions are now much tighter than when the debt was issued. "The increased indebtedness of the private equity owned corporate sector makes it more fragile