Treasury Committee publishes responses to Greensill report
24 Sep 2021 01:06 PM
The Treasury Committee today publishes the responses from the Government, FCA and Bank of England to its report on Lessons from Greensill Capital.
The Committee’s report, published in July, considered lessons for the Treasury and the regulation of the financial system, following the failure of Greensill Capital.
The report included the following recommendations:
- Greensill made use of the ‘appointed representatives’ regime. Given that firms may be using the regime for purposes well beyond those for which it was originally designed, the Committee recommended that the FCA and Treasury consider reforms, with a view to limiting its scope and reducing opportunities for abuse.
- As a matter of urgency, the Committee recommended reform of the Change in Control process which regulates who can acquire ownership of an existing bank, to ensure that the Prudential Regulation Authority (PRA) has powers to ensure that existing banks do not fall into the hands of owners who would not be granted a banking licence in their own right.
- On lobbying, the Committee recommended that the Treasury put in place and publish formal processes to deal with lobbying attempts by ex-Prime Ministers or Ministers in the future.
- Greensill also operated Earnd, a salary advance service provided to NHS Trusts. The Committee recommended that the Treasury be more involved in determining whether such 'novel' schemes, when provided for free, are appropriate in the provision of public services.
- It was also recommended that the Treasury consider what information is needed to plan for potential future emergencies and ensure that planning exercises involve the consideration of the potential economic impacts.
- The Committee expressed concern that Government records, held on the phone of the Permanent Secretary, are subject to deletion based on lapses of memory. It recommended that the Government reviews its policies to prevent the complete deletion of Government records by the misremembering of a mobile phone password.
Further information