FCA outlines Greensill investigations ahead of public hearings

The Financial Conduct Authority is working with German, Swiss and Australian regulators on investigating the Greensill scandal.

FCA outlines Greensill investigations ahead of public hearings

LONDON — The British financial regulator said it was investigating Greensill Capital and also working with other agencies in the country and abroad on inquiries, “some of which are potentially criminal in nature.”

The Financial Conduct Authority’s chief, Nikhil Rathi, made the disclosure in a letter to the Treasury committee of the British parliament, which today begins a series of hearings into the matter.

Lex Greensill, the financier who founded the eponymous firm specializing in supply-chain finance, testifies to the committee at 3:30 p.m. today.

The committee published responses to its written questions from government agencies as well as former Prime Minister David Cameron, who worked as a lobbyist for Greensill Capital. While leading the country, Cameron appointed Lex Greensill as an adviser. Cameron testifies to the committee on Thursday.

In his own letter to the Committee, Cameron said he was not aware that Greensill Capital had been on the brink of failure since roughly the onset of the pandemic in 2020, when he persistently lobbied the Treasury and Bank of England for access to state relief schemes for the firm. “The first time I became concerned that the company might be in serious financial difficulty was in December 2020 following a call I received from Lex Greensill,” Cameron said.

However, in emails previously published by the Bank of England, Cameron told regulatory officials in March 2020 that “the disruption to supply chains and the financing of them is real. In the last week we have seen a great many fixed income investors who support the asset class step back.”

A key part of Greensill’s business model was to repackage the loans it handed out as bonds, or fixed-income securities, and sell them on to investors.

Greensill Capital was not directly regulated by the FCA, but it acted as an “appointed representative” of a regulated firm called Mirabella Advisors, which is now also under investigation, according to Rathi.

The FCA is working with German, Swiss and Australian regulators on investigating the Greensill scandal, Rathi said. “There are other jurisdictions that are considering matters and we will continue also to cooperate with authorities in those jurisdictions under the terms of our international memoranda of understanding.”

This article is part of POLITICO’s premium policy service: Pro Financial Services. From the eurozone, banking union, CMU, and more, our specialized journalists keep you on top of the topics driving the Financial Services policy agenda. Email for a complimentary trial.

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Barnier seeks limelight with pledge to shut borders

The former Brexit negotiator says France should press the pause button on immigration.

Barnier seeks limelight with pledge to shut borders

PARIS — In a shock pledge amid a stuttering presidential bid, former Brexit negotiator Michel Barnier has told French TV he wants to suspend immigration to France for 3-5 years and toughen checks on the EU’s external borders.

“There are links between [immigration flows] and terrorist networks which try to infiltrate them,” he told RTL-LCI-Le Figaro on Sunday, adding that he didn’t think all immigrants “including those who are trying to cross the Mediterranean to find a better life, are major terrorists or delinquents.”

Barnier, a conservative former finance minister, said immigration was a threat to the stability of French society.

“There is a risk of an explosion, particularly on the topic of immigration,” he said. “We need to introduce a moratorium on immigration. We need to take time to evaluate, check and if necessary, change our immigration policies.”

The comments made Sunday come as Barnier, who represented the EU in Brexit negotiations from 2019 to 2021, seeks to drum up interest in a bid for the French presidency next year. So far the ex-minister, a member of the conservative Les Républicains party, is not considered among the main challengers to President Emmanuel Macron’s re-election bid.

“We need to take stock of the situation, stop family reunions,” he said. “We need to look at the way we give residency permits, health-related permits and the way we use the resources of our [benefits agency].”

“We need to take the time to build a national consensus on these issues.”

Barnier said refugees and students would still be allowed to apply for residency permits to come to France.

In a later interview, Barnier added that France should kickstart talks with neighbors on the Schengen area and push for stricter controls on the EU’s external borders.

The comments prompted outcry in the U.K., where Barnier has been the focus of intensive coverage throughout the Brexit negotiations.

Some commentators quipped that if Europe had taken a tougher stance on immigration as currently proposed by Barnier, Brexit may not have happened.

“Barnier advocating complete cessation of immigration for 3-5 years + suspension of Schengen. Ironic, because if the EU had allowed much milder restrictions on free movement of people, Brexit would probably never have happened. (And yes I know he probably means non-EU immigration),” tweeted Financial Times commentator Gideon Rachman.

Barnier has repeatedly hinted at his intention to run as a candidate for the presidential election next year, but his bid has so far failed to gather momentum. His party Les Républicains remains undecided on how to pick its candidate, whether to choose a primary-style system or simply back a so-called “natural” candidate. Conservative frontrunners include a former minister, Xavier Bertrand, and Valérie Pécresse, head of the greater Paris region.

In France, where Barnier is seen as a centrist, critics said the immigration pledge put him closer to the line of far-right National Rally leader Marine Le Pen, who is campaigning for the French presidency with a pledge to halt immigration to France.

Barnier said he refused to be compared to Le Pen, but that his experience with Brexit warned him against complacency in politics.

“For four and a half years, I have been handling an unlikely event in Brexit,” he said, “you have to be careful of unlikely events. A [Le Pen] victory is possible if others remain weak.”

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