Too big to fail?

The Gupta tactic:

Greensill Capital, the finance firm underpinning a swathe of Britain’s steel industry, has collapsed into insolvency after telling the High Court it had “no conceivable way” of meeting a $140m repayment demand from its Swiss bank backer.

The company, which promoted its supply chain lending as “democratising capital” and counted David Cameron as an adviser, revealed it could not afford to repay Credit Suisse.

Greensill, named after its Australian founder Lex Greensill, formally applied for administration after days teetering on the brink.

The move intensified concern over Sanjeev Gupta’s metals empire GFG Alliance, which was Greensill’s biggest client and has borrowed billions of pounds from the firm.

Mr Gupta’s UK business, Liberty Steel, employs about 5,000 workers at plants including Rotherham and Hartlepool. Greensill told the High Court that GFG “has started to default” on its debts.

If you’re big enough then you’re too big to be allowed to fail.

I don’t think he is but we’ll see.

6 thoughts on “Too big to fail?”

  1. “counted David Cameron as an adviser”

    Ah hahahahahahahahahaaaaah.

    Fucking useless PR twat.

  2. Bloke in China (Germany province)

    Two words for those who stuck their savings in this:
    Icesave
    Kaupthing

    Some people are incapable of learning from history.

  3. A good friend (sadly no longer with us) was investment director of a mid-sized insurance company. A new CEO asked him what he did to maximise the return on overnight money. “Nothing at all” he replied, “because an extra basis point might be worth a grand a year, but if the bank goes tits-up it’ll cost us £10 million”. This was less than a thousand years before Kaupþing et al.

  4. Another result of the apocalyptic amounts of funny money – QE, FRB etc – washing about. Classic Austrian Business Cycle Theory failure. A ‘mis-allocation’ of capital if ever there was one.

Leave a Reply

Your email address will not be published. Required fields are marked *