MPs question the Treasury’s permanent secretary, Tom Scholar, and the chancellor, Rishi Sunak, over Greensill Capital’s failure
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Conservative MP Steve Baker asks whether Greensill’s insistence that it was a fintech (despite doling out ages-old supply chain finance products) helped blind authorities to the risks:
Do you think the government might be vulnerable at all to a sense of excitement about innovation and, therefore, there may be a bit of vulnerability to anyone who …can use the right buzzwords?
Do you think our enthusiasm might possibly sometimes bind us to conventional financial risks?
That’s the challenge we have as policymakers.
On lessons to be learned from the Greensill collapse, Sunak (who seems to be excited to refer back to his HUGE binder) says he doesn’t want to pre-empt any reviews by the Financial Conduct Authority, but there are some questions that need to be asked on the regulatory side.
They include whether the FCA has the right powers, and whether the appointed representative regime (which allows firm likes Greensill to outsource their regulatory responsibilities to a third party) should be reviewed.
That’s something that we have already started to work on.
Related: Greensill Capital collapse shows City watchdog needs shake-up, say MPs
