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David Cameron

Greensill’s Collapse Inquiry and David Cameron’s Lobbying

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He said he first became concerned about his company’s financial health in December, when a German regulatory agency said a bank that Greensill Capital had acquired needed to reduce its exposure to one customer.

The request “was going to be impossible for us to comply with,” Mr. Greensill said.

Greensill’s business model has raised concerns and even accusations of fraud. Its main offering was supply chain finance, in which a middleman advances payments to suppliers and then the money is repaid by the buyer. It’s a long-established kind of financing, usually provided by banks, but Greensill added a twist. It packaged the invoices and other receivables by the suppliers into assets that were then sold to investors through funds. The company also provided financing to companies based on “future receivables,” which were based on transactions that hadn’t yet happened.

In Tuesday’s hearing, held virtually, Mr. Greensill strongly defended the business model.

“Every asset we ever sold was correctly described,” he said, adding that all investors would have had complete information about what they were buying.

But he made a small admission to failures he had made. He told lawmakers that one of his company’s innovations was taking information directly from company accounts to make fast lending decisions. This “absolutely is the future but the way that I did it definitely had flaws,” he said without specifying what they were.

In March, as the insurance coverage came to an end, Credit Suisse shut down $10 billion worth of supply chain finance funds it sold that were put together by Greensill. The Swiss bank has returned just under half the amount to investors but is still exposed to billions of dollars in potential losses.

“I bear complete responsibility for the collapse of Greensill Capital,” Mr. Greensill said, adding that he was “desperately saddened” that more than 1,000 of his employees had lost their jobs. But he added: “It’s deeply regrettable we were let down by our leading insurer, whose actions assured Greensill’s collapse.”

The Financial Conduct Authority, Britain’s chief financial regulator, said in a letter to the committee that it was “formally investigating” Greensill because some of the allegations about its failure are “potentially criminal in nature.” The authority is also working with regulators in Germany, Australia and Switzerland, Nikhil Rathi, the regulator’s chief executive, wrote.

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Credit Suisse reports a loss as regulators open an investigation.

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Credit Suisse said on Thursday that it suffered a loss in the first quarter stemming from loans it made to the collapsed investment fund Archegos Capital Management, a debacle that has prompted Switzerland’s financial regulator to investigate whether the bank was doing a poor job monitoring the riskiness of its investments.

The loss of 252 million Swiss francs, about $275 million, from January through March came after a loss of 4.4 billion francs from Archegos that wiped out a big increase in revenue. Credit Suisse also said on Thursday that it had sold bonds to investors to raise $2 billion to shore up its capital.

The bank expects additional losses from Archegos of about $655 million as it finishes winding down its exposure to the firm, Thomas Gottstein, the chief executive of Credit Suisse, said during a conference call with reporters Thursday.

The bank, based in Zurich, has suffered a series of calamities this year that have severely damaged its reputation and finances. Swiss regulators are also investigating a spying scandal and Credit Suisse’s sale of $10 billion in funds packaged by Greensill Capital. The funds were based on financing provided to companies, many of which had low credit ratings or were not rated at all. Greensill collapsed in March, and its ties to former Prime Minister David Cameron of Britain have caused a political scandal.

Finma, said it would “investigate in particular possible shortcomings in risk management” at Credit Suisse. Finma also said it would “continue to exchange information with the competent authorities in the U.K. and the U.S.A.”

The Wall Street Journal that Credit Suisse’s exposure to Archegos had reached more than $20 billion before the fund collapsed in late March. Mr. Gottstein conceded that Credit Suisse was one of the banks most exposed to Archegos.

The quarterly loss, which Mr. Gottstein described as “unacceptable,” compared with a profit of 1.3 billion francs in the first quarter of 2020.

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In Chaos of Super League Fiasco, Johnson Seizes an Opportunity to Score

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LONDON — Fans loathed it, politicians opposed it and even Prince William warned of the damage it risked “to the game we love.”

So swift and ferocious was the backlash to a plan to create a new super league for European soccer that on Wednesday six of England’s most famous clubs were in disarray, issuing abject apologies as they disowned the failed breakaway project they had pledged to join.

Yet not everyone was a loser. For Prime Minister Boris Johnson of Britain, the crisis has presented a rare opportunity to seize the moral high ground on an issue that matters to many of the voters who helped him to a landslide victory in the 2019 election.

Threatening to use any means he could to block the plan, Mr. Johnson positioned himself as the defender of the working-class soccer fans whose forebears created England’s soccer clubs — and the enemy of the billionaire owners who now dominate the English game.

international soccer authorities threatened reprisals against the super league clubs and players, their position was untenable, he said.

announced in 2019 that it would move its headquarters to Singapore, citing growing demand in Asia.

In recent months, the successful roll out of vaccines against Covid-19 has revived Mr. Johnson’s fortunes after a succession of missteps last year when the government’s handling of the pandemic faltered.

So prevalent is soccer now in Britain’s national life that it cropped up then, too.

In April 2020, the health secretary, Matt Hancock, attacked highly paid soccer players, calling on them to “take a pay cut and play their part,” during the pandemic. But within months the government was outmaneuvered by Marcus Rashford, a star player for Manchester United and England.

Invoking his own poor childhood, Mr. Rashford galvanized a campaign against child poverty, and ultimately forced Mr. Johnson to change policy over free school meals.

This week the boot was on the other foot as Mr. Johnson was able to condemn the super league plans before Mr. Rashford, whose club initially signed up to the proposals.

It required no expertise to be “horrified” at the prospect of the super league “being cooked up by a small number of clubs.,” wrote Mr. Johnson in the Sun newspaper.

“Football clubs in every town and city and at every tier of the pyramid have a unique place at the heart of their communities, and are an unrivaled source of passionate local pride,” he added.

Never a big soccer fan himself, Mr. Johnson framed his opposition to the plan in his belief in competition.

Each year the three worst performing clubs are relegated from England’s Premier League — its top domestic tier — while the top ones qualify to play in European competitions the following season. The European Super League proposal would have seen a number of big soccer clubs becoming permanent members — something that Mr. Johnson likened to creating a cartel.

In fact, when England’s first Football League was established in 1888 it was on a similar model and its membership was not selected on merit, said Matthew Taylor, professor of history at De Montfort University, Leicester who has written widely on soccer.

Yet the furor over the European Super League illustrates the growing role soccer has played in national life in recent decades.

“In the last 15-20 years it seems to be so pervasive and so significant to British culture — very broadly defined — that politicians have to say something,” Professor Taylor said.

No longer does it seem odd for politicians and members of the government “to make statements on issues that 40-50 years ago would have been seen as private matters,” he added.

That change first became noticeable under Tony Blair’s premiership as the growing success of the English Premier League, combined with the country’s “cool Britannia” branding, gave soccer a great profile.

But soccer can be dangerous territory too for politicians. Mr. Cameron was much mocked when he once appeared to forget his long-running claim to support the Birmingham team Aston Villa and seemed to suggest he favored a rival that played in similar colors.

Mr. Johnson, who appears to prefer rugby to soccer, has avoided that fate by never declaring his allegiance to any team.

But suggestions that the government might legislate to control the ownership of clubs seemed to conflict with Mr. Johnson’s free-market instincts.

Although a Saudi Arabian plan to buy the Premier League club Newcastle United ultimately failed, Mr. Johnson promised the Saudi crown prince, Mohammed bin Salman, that he would investigate a holdup to the proposed take over, according to British media reports.

“One of the many dishonesties in all this is that it would allow money to corrupt football,” said Professor Menon, referring to the European Super League plan. “Money has already corrupted football. Rich clubs get richer.”

The professor said he believed that very little would ultimately change because any substantial intervention would upset the successful operations of the Premier League, and therefore annoy fans.

But Professor Taylor pointed to Germany as a successful alternative model, and said that in threatening to intervene in the running of soccer Mr. Johnson might ultimately disappoint some of those who are applauding him now.

“Having made such a significant and bold statement, I don’t think this discussion will go away now,” Professor Taylor.

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