Greensill Capital
Greensill Capital Collapse
Estimated impact: $10B+ in frozen funds; 3,000+ jobs at risk in GFG Alliance
Supply chain finance firm collapsed when Credit Suisse froze $10B in linked funds. Greensill had been financing "prospective receivables" (invoices that didn't yet exist) and concentrated exposure in Sanjeev Gupta's GFG Alliance.
Decision context
Founder Lex Greensill convinced Credit Suisse asset management and SoftBank to back increasingly aggressive lending against future receivables. Insurance coverage from Tokio Marine was not renewed but this was not disclosed to fund investors.
Biases present in the decision
Toxic combinations
- Yes Committee
- Echo Chamber
Reference class base rates
Across all 146 curated case studies in our library:
Lessons learned
- Supply chain finance against prospective receivables is unsecured lending in disguise
- Insurance coverage status must be continuously verified, not assumed
- Concentration risk in a single counterparty defeats the purpose of diversified trade finance
Source: UK Parliament Treasury Committee report on Greensill Capital, 2021; FT investigation (News Investigation)
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