To ask the Chancellor of the Exchequer, what discussions his Department had with the Department for Business, Energy and Industrial Strategy on the decision to make Greensill Capital an accredited lender under the Coronavirus Large Business Interruption Loan Scheme.
13 April 2021
There is a robust accreditation process in place for lenders seeking to lend through the coronavirus business lending schemes. This process is run independently by the British Business Bank (BBB), which is an arms-length body of the Department for Business, Energy and Industrial Strategy.
HM Treasury’s only role in the Coronavirus Large Business Interruption Loan Scheme (CLBILS) accreditation process is where lenders are seeking to make individuals loans of over £50 million, given the significant exposure such loans would represent to the taxpayer.
In order to lend at this level under CLBILS, lenders were required to complete an enhanced accreditation process via the BBB. This additional accreditation was generally restricted to lenders supervised by the Prudential Regulation Authority and approved for internal risk-based modelling, as the government (and the regulators) have confidence in the oversight of these lenders and their track record of business lending at this scale.
Once this additional accreditation process had been completed, if the BBB were prepared to accredit lenders to make loans over £50 million they would approach HM Treasury for a go/no-go decision on providing that lender with the enhanced accreditation. HM Treasury was not approached on this basis in relation to Greensill.