Greensill Bank insolvency: German municipalities looking for interest

E.t is a long way from the sugar cane fields in Bundaberg in the north of Queensland, Australia to the bank towers of London, from the resourceful farmer’s son to the billionaire financial juggler, from the combine harvester to the private plane. Alexander Greensill, known as Lex, took a good three decades to do this. The way back was faster.

It led from London via Swiss credit institutions, a Bremen bank and the Australian capital Canberra to the unadorned offices of insolvency administrators. It will end in courtrooms. Because the financial group that he forged and then – as if he was running a traditional bank – baptized in his own family name, collapses.

German investors are also drawn into the abyss. There are fewer private investors who parked around 1 billion euros in the Bremen branch of Greensill Bank. On Monday evening, the financial supervisory authority Bafin applied for insolvency for them at the Bremen District Court. Investors can calmly watch how the German banks’ deposit protection fund will take effect.

Half a billion euros should not be protected

Of deposits over 3.6 billion euros, however, 500 million euros are said to be unprotected. This is why there is nervousness in many town halls that have invested money in Greensill with short terms: from small ones like Weissach to medium-sized ones like Monheim to large ones like Wiesbaden. 26 affected municipalities, which together can no longer access deposits of 255 million euros at the bank, held a conference this week in order to legally position themselves for the insolvency proceedings and to look for a way out.

Whether and how they will find him is open. Because many investors around the world are looking for ways out of the Greensill Crisis. Those involved, such as former Australian Foreign Minister Julie Bishop, who oversaw Greensill’s Asia-Pacific business as Chairwoman, fear for their reputation. The Indo-British entrepreneur Sanjeev Gupta fears for his money.