Recommendation 9

We asked the Bank how much weight it had placed on the work of others, such as Greensill’s auditors, Saffery Champness, in its decision to accredit Greensill. The Bank told us that the auditor’s opinion about the financial health of Greensill was considered as part of the accreditation process and that it placed reliance on the audited accounts.17 In June 2021, it was reported that the Financial Reporting Council was investigating Saffery Champness in relation to its audit of Greensill’s financial statements for the year ended 31 December 2019.18 We asked whether, in hindsight, the Bank should have been more sceptical in relying on assurances from Saffery Champness. The Bank told us that it considered it was “within our rights to rely on that audit” but recognised that, with a more sceptical approach, it might have come to a different outcome.19 We also asked the Bank whether it challenged Greensill on who it planned to lend to under CLBILS. The Bank confirmed that while it would not perform a credit assessment of the underlying borrowers as part of the accreditation process, it did discuss Greensill’s lending pipeline, which “appeared an appropriate pipeline”.20 However, prior to its initial accreditation, the Bank did not request the names of the individual borrowers Greensill planned to lend to. In its letter to us after our evidence session, the Bank told us that it subsequently requested this information but did not perform any due diligence on Greensill’s potential borrowers. The Bank also explained that this was the responsibility of Greensill.21