How a lightly regulated UK firm can generate substantial potential losses?
Greensill was a provider of supply chain financing which filled bankruptcy in 2021
Greensill was a private equity owned firm that offered supply chain financing
Most of its funding came from one global bank, via a fund offering sold to wealth management clients.
Some funding came from a small bank in Germany
By Frank Student, S123456 §Most of the trade credit insurance, that suggested these were safe products for investors, was concentrated with one credit insurer (Bloomberg, March 2021)
The importance of this case is many, but it raises:
How a lightly regulated UK firm can generate substantial potential losses?
Management of any conflicts of interest
Seemingly weak internal governance and ties to powerful political forces
Who will pay? Investors, credit insurers, depositors, banks? It is a systemic issue?
