Recommendation 8

The Bank accredited Greensill to lend under both CBILS and CLBILS. As Greensill was not PRA regulated nor did it have a pre-existing relationship with the Bank, it was initially 6 Qq 17, 19; C&AG’s Report para 2, 2.4 7 C&AG’s Report, para 2.6, Figure 9 8 Q 14 9 Committee of Public Accounts, Covid-19: Bounce Back Loan Scheme, 33rd Report of Session 2019–21, HC 687, December 2020 10 Q 19 11 Q 18; C&AG’s Report, para 10 12 Q 29; C&AG’s Report, para 2.6 13 Q 29, C&AG’s Report, paras 2.2, 2.6 12 Lessons from Greensill Capital: accreditation to business support schemes subjected to the Bank’s standard accreditation process, with subsequent applications completed through the accelerated process. The Bank undertook limited due diligence on Greensill’s application—as with other non-bank lenders—accepting key information at face value. The Bank did carry out some cross-referencing of Greensill’s application with its 2018 audited accounts, but important figures, such as Greensill’s stated £120 billion of financing in 2019, could not be verified using publicly available information. The Bank told the NAO that the purpose of its due diligence was not to conduct a detailed assessment of Greensill’s financial position, but to confirm that lenders could reliably deliver money to borrowers, in line with government’s objectives for the scheme.14 We therefore asked the Bank what it had done to satisfy itself that the information provided by Greensill was accurate. The Bank told us that it “would imagine” this £120 billion figure was accurate, adding that while there was no single source to verify it, there was “plenty of evidence” that Greensill had “run very significant debt investment programmes for significant global investors across the world”.15 It explained that while it did not have a commercial relationship with Greensill prior to CBILS and CLBILS, it was aware of the organisation and “knew them as a leading player in the UK finance market” and “had observed their work in the