Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Acknowledged
The Bank told us that it had acted immediately to protect the taxpayers’ position by...
Conclusion
The Bank told us that it had acted immediately to protect the taxpayers’ position by preventing Greensill from making any further loans under the schemes.56 The Bank engaged Ernst & Young (EY) between October 2020 and March 2021 to examine all eight of Greensill’s CLBILS loans.57 The Bank explained that its investigation considered both Greensill’s compliance with the scheme rules around lending to groups and more broadly “whether they were a prudent lender, whether they had fulfilled the standard of care, whether they had acted in good faith and whether they had brought the scheme into disrepute”. Following EY’s report, the Bank provisionally concluded that Greensill was in breach of the scheme rules. The Bank informed Greensill of its decision on 2 March 2021 via a ‘Letter of Concern’.58
Government response summary AI-generated
The government acknowledges the Bank's actions, stating the loan guarantees remain suspended during the ongoing investigation and outlining the potential maximum liability if the guarantee is reinstated.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
The Bank subsequently suspended the government loan guarantees while the investigation is on-going. In the meantime, the government is not obliged to pay Greensill in the event of borrower default. However, if the guarantee is reinstated and the borrowers default on Greensill’s loans, the government will be exposed to a maximum liability of £335 million.
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