Greensill, Cameron and the return of Tory sleaze

The collapse of Greensill Capital threw a spotlight on political lobbying when it emerged that former PM David Cameron had been fighting its corner. Just how big a problem is it?

David Cameron illustration
(Image credit: David Cameron illustration)

What’s happened?

Greensill Capital was in the “supply-chain finance” business – a modern spin on a well-established payment system known as reverse factoring. It involves intermediary lenders (such as Greensill) earning a small fee on loans that allow purchasing companies to smooth out their spending and suppliers to get paid more quickly if they accept a fractionally lower payment. It’s a legitimate business, but opaque and unloved by regulators since it can be used to disguise spiralling borrowing. Greensill was one of a handful of firms that made the basic concept more risky by selling off loans in order to write more, and packaging supplier debt into bond-like investments. In Greensill’s case, the major customer of the packaged loans was Credit Suisse, which put them into funds sold to outside investors. This risky model unravelled after the insurers covering Greensill’s mounting credit risk decided to end the cover – and no other insurers could be found.

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.