FCA looked at Greensill two months before its collapse
The City regulator started to examine supply chain finance firm Greensill months before its collapse, it has emerged.
The head of the Financial Conduct Authority told MPs on Wednesday that the regulator had had “very detailed preparatory thinking going on during January and February” before Greensill’s collapse in March.
Greensill Capital was the brainchild of former Citigroup and Morgan Stanley financier Lex Greensill and received backing from Softbank’s Vision Fund.
It specialised in supply chain finance and claimed to lower costs before grabbing headlines after crashing into insolvency in March.
FCA boss Nikhil Rathi faced criticism from MPs that the watchdog had been too late to recognise the scandal surrounding Greensill. He defended the FCA and said commercial lending, including supply chain finance, fell outside of its reach.
He conceded there was scope for to gather more information on non-bank finance.
“We need to have a mindset and a regulatory and legislative regime which at least allows us to get information,” he said. “At the very least we need to know what’s going on in these areas which are not formally regulated.”
He was asked whether Greensill had been “off-limits” because of its connection to David Cameron but Rathi said he had seen “no evidence” to suggest this.
It has emerged former Prime Minister David Cameron, who was an adviser for the firm, had intensely lobbied politicians and officials in a bid to secure Greensill access to the government’s coronavirus loan scheme.
His lobbying for Greensill Capital is being scrutinised by multiple inquiries, including one by Boris Johnson and one by the Treasury Select Committee. He is set to appear before the committee this afternoon.
It comes after the publication of more than 40 texts the former PM sent to ministers and officials.