Germany has made a welcome move on the private equity issue. As the FT has reported, Peer Steinbr?ºck, Germany's finance minister, is proposing to limit a German company's right to deduct unlimited interest payments from profits and substitute a limit of one-third of annual pre-tax earnings.

As Forbes has noted, Peer Steinbruck has said:

If that has 'an impact on this particular sector, then so be it. That's the point.

The German venture capital market has claimed that the change will harm returns in the leveraged buy-out sector but also the country as a whole. The consensus appears to be against them.

As for the proposed measure, it is bold: brash even. I have to admit though such an unsubtle approach seems appropriate. I've played with some attempts at more sophisticated rules to see how this abuse can be targeted, and I'm not winning with them because all would be easy to abuse. The German measure will be hard to abuse.

I expect it will roll out across Europe, which will be good for equity markets and bad for banking. Overall, that's welcome. Accountability rests in the equity markets.