Pension funds risk huge losses as Greensill rescue hopes fade...

Local, national, international and oddball news stories

Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Wed Mar 10, 2021 10:54 pm

Institutional clients of more than 50 global banks had put money into Greensill Capital, which went into administration in the UK this week

Image
Lex Greensill

Pension funds are at risk of being dragged into the fallout around Greensill Capital because bankers pumped their money into the business lender before it collapsed.

More than 50 global banks provided capital from institutional clients to Greensill, an insider said - with pension funds, major savings firms and blue chip businesses all now caught up in the chaos.

Sources close to the failed lender expect a slew of court cases as the businesses fight with their insurers over who will be landed with the losses.

Greensill filed for administration on Monday after Credit Suisse pulled the plug on a partnership and loan repayments were frozen by its biggest customer, the steel tycoon Sanjeev Gupta.

A source close to Greensill said: "Trade credit insurers and institutional investors will now have a bun-fight over who pays the loss.

"Investors could be left holding the ticket."

It is estimated that Greensill distributed more than $10bn (£7.2bn) of assets a month last year. However, banking sources said major high street lenders including Lloyds, NatWest and Barclays are not exposed to the collapse and no UK lender is facing a material risk.

The burden is instead expected to fall on City firms whose bankers had lodged their money at Greensill for 30 or 60 days at a time. Greensill lent this funding out and then paid a return to the investors.

Any capital in its hands at the time of the collapse is likely to have been lost. Although these losses are insured, wrangling over who pays the bills could drag on for months or years.

Clients such as Mr Gupta have been enthusiastic about Greensill's "reverse factoring" services, a controversial form of cash advance where a company pays suppliers early using borrowed funds.

Greensill, which attracted backing from the Japanese investment giant Softbank, then packaged up the debt and sold them on via banks including Credit Suisse.

The complex structure rapidly unravelled after the Swiss institution froze $10bn worth of funds invested in Greensill debt last week, warning that there was considerable uncertainty about what some of these holdings were worth.

Credit Suisse has now temporarily replaced three employees in its assets management division after the bank was forced to freeze a $10bn group of supply-chain finance funds it had run with Greensill, Bloomberg reported.

Credit Suisse declined to comment.

Image
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Wed Mar 10, 2021 10:57 pm

Greensill then packaged up the debt and sold them on via banks


It's 2008 all over again! :roll:
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby rebbonk » Thu Mar 11, 2021 1:47 am

And with Sunak's latest folly we can expect another repeat in about 10 years' time.
Of course it'll fit; you just need a bigger hammer.
User avatar
rebbonk
 
Posts: 65580
Joined: Thu Nov 12, 2009 7:01 am

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Mon Mar 22, 2021 2:45 am

David Cameron lobbied for Greensill access to Covid loan schemes

Image

David Cameron lobbied the UK government to increase Greensill Capital’s access to state-backed emergency Covid-19 loan schemes, months before the finance company collapsed and left the taxpayer on the hook for potential losses.

The former UK prime minister, who became an adviser to Greensill in 2018, pressed his former colleagues to give the company a bigger role in programmes designed to keep credit flowing to pandemic-hit businesses, according to people briefed on the matter in Whitehall and the City.

Public records show Greensill representatives had 10 virtual meetings between March and June last year with the two most senior officials at the Treasury as they sought access to a Bank of England loan scheme.

What the records do not show — but the FT has established from industry and Whitehall sources — is that Cameron also intervened personally on behalf of the company.

Treasury officials were reluctant to include Greensill in the Bank of England’s Covid Corporate Financing Facility, even though the finance group said “concerns about their eligibility for the CCFF were misplaced or could be addressed”, according to the records released under the Freedom of Information Act.

Greensill then deployed Cameron to lobby his former colleagues. The former prime minister approached the Treasury and 10 Downing Street — through both his personal email and at least one phone call, according to two people familiar with the conversations. The FT contacted both Cameron and his spokesman asking for comment but they did not respond.

In mid-May, as Treasury officials continued to resist Greensill’s approach, chancellor Rishi Sunak stepped in and asked Charles Roxburgh, the second permanent secretary at the Treasury, to give the company a further hearing.

Image
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Mon Mar 22, 2021 2:45 am

Rotten to the core! :fuming:
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Mon Mar 22, 2021 2:55 am

David Cameron’s multiple texts to Rishi Sunak to bail out Greensill

Image

David Cameron sent multiple texts to Rishi Sunak lobbying him to grant hundreds of millions of pounds in loans to a controversial company that later went bust.

In April last year the former prime minister sent several text messages to Sunak’s private phone urging him to lend to Lex Greensill’s eponymous finance firm. Most went unanswered.

At the time Cameron was an adviser to Greensill and had share options potentially worth up to tens of millions.

Cameron, 54, tried to secure loans for the company from the government’s Covid Corporate Financing Facility (CCFF), a pandemic fund for big, blue chip firms to borrow at low rates.

Greensill, an Australian-born financier based in Cheshire, had already held unsuccessful talks with officials about a taxpayer-funded bailout.

In response Sunak is understood to have stood by officials who felt the company did not qualify for the scheme. He is understood to have then referred Cameron to senior officials at the Treasury. Those Cameron later contacted are understood to include Tom Scholar, the permanent secretary, and Charles Roxburgh, the second permanent secretary.

The Treasury later made a final decision to reject the company’s application. It has called in administrators this month, rendering Cameron’s share options worthless.

Image
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby rebbonk » Mon Mar 22, 2021 3:18 pm

dutchman wrote:Rotten to the core! :fuming:


Absolutely. Some might even say corrupt.
Of course it'll fit; you just need a bigger hammer.
User avatar
rebbonk
 
Posts: 65580
Joined: Thu Nov 12, 2009 7:01 am

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby rebbonk » Fri Mar 26, 2021 1:45 am

LONDON (Reuters) -Britain’s former prime minister David Cameron is being investigated by an independent oversight body after reports he had campaigned for government help for now collapsed supply chain financier Greensill Capital.

The Financial Times reported that Cameron lobbied the government to increase the company’s access to COVID-19 loan schemes, months before the finance company collapsed.

“The Registrar of Consultant Lobbyists is investigating whether Mr David Cameron has engaged in unregistered consultant lobbying,” the body said in a statement on Thursday.

It said it would not comment further while the investigation was ongoing.

Asked in parliament about what kind of investigation the government was planning into the case, business minister Kwasi Kwarteng avoided commenting directly, saying: “Officials often meet with a range of businesses affected by policy changes, that’s part of policy development, but it’s always done with proper and due consideration.”

On Wednesday, Prime Minister Boris Johnson said he had no knowledge that Cameron had lobbied Downing Street officials to help Greensill. His spokesman said last week that the finance ministry decided not to support a request made by the collapsed company for the loans after “due process”.


Source: https://www.reuters.com/article/uk-britain-greensill-investigation/uks-former-leader-cameron-under-lobbying-investigation-idUSKBN2BH178

I doubt anything'll come of it other than a mild rebuke, if that. :fuming:
Of course it'll fit; you just need a bigger hammer.
User avatar
rebbonk
 
Posts: 65580
Joined: Thu Nov 12, 2009 7:01 am

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby dutchman » Fri Mar 26, 2021 2:56 am

I find it difficult - no, impossible to believe Sunak didn't notify Johnson of Cameron's request?

Aside from the fact that M.I.5 and GCHQ monitor all ministerial communications, imagine if Sunak had not notified Johnson and Johnson found out later. What do you think his reaction would have been?

My guess is that Sunak asked Johnson what he should do and Johnson then told Sunak to tell Cameron to go stuff himself (or words to that effect).
User avatar
dutchman
Site Admin
 
Posts: 50290
Joined: Fri Oct 23, 2009 1:24 am
Location: Spon End

Re: Pension funds risk huge losses as Greensill rescue hopes fade...

Postby rebbonk » Fri Mar 26, 2021 6:01 pm

LONDON (Reuters) - An independent oversight body on Friday cleared former Prime Minister David Cameron of breaking rules after reports he lobbied Downing Street officials to help collapsed supply chain financier Greensill Capital secure state-backed loans.

“The Registrar of Consultant Lobbyists has concluded his investigation into whether the Rt Hon David Cameron has engaged in unregistered consultant lobbying,” the registrar said in a statement.

“His decision is that based on detailed information and assurances provided, Mr Cameron’s activities do not fall within the criteria that require registration on the Register of Consultant Lobbyists.”


Source: https://www.reuters.com/article/uk-britain-greensill-investigation-camer/former-pm-cameron-cleared-of-breaking-lobbying-rules-after-greensill-reports-idUSKBN2BI2KE

Stinks to high heaven. :fuming:
Of course it'll fit; you just need a bigger hammer.
User avatar
rebbonk
 
Posts: 65580
Joined: Thu Nov 12, 2009 7:01 am

Next

Return to News

Who is online

Users browsing this forum: No registered users and 4 guests

  • Ads