The Bank of England will consider tighter banking regulations following the liquidation of indebted Wyelands Bank, a lender majority owned by troubled Liberty Steel boss Sanjeev Gupta.
Appearing before Members of the Treasury Select Committee on Monday, Bank of England Governor Andrew Bailey said there could be lessons to be learned after Gupta took control of the Wyelands. The bank subsequently granted a series of loans to a network of companies controlled by its partners.
“We’ll go back and look at the lessons,” Bailey said. “There have been a few changes in the procurement rules in recent years, but we’ll get to that.”
Bailey said if the central bank had forced Wyelands to downsize over the past year, paying off borrowers and then depositors, an investigation could highlight practices that will require further examination.
Former Tory Prime Minister David Cameron lobbied as a consultant on behalf of finance firm Greensill Capital to access government loans at the height of the coronavirus first foreclosure in 2020. Greensill was a major lender to the company by Gupta.
Wyelands and Greensill Capital have ceased operations and Wyelands is under investigation by the Serious Fraud Office. Bailey added that the National Crime Agency was also involved in the Wyleands investigation.
Bank of England Deputy Governor Jon Cunliffe was asked why Greensill’s request was considered if the central bank had joined all points between Wyelands, Gupta and Greensill at the time of the loan request.
Cunliffe said he was aware of the relationship, but he treated the request as part of the government program on its own merits and told the Treasury it was not part of the program.
Former City Minister Paul Myners told the committee in a previous hearing that the government could end up footing the bill for state-guaranteed defaulted loans and social support for thousands of steelworkers whose Jobs are currently at risk at one of Greensill’s biggest borrowers, Liberty Steel. , owned by Gupta.