Context and key messages
Alongside Archegos, the Greensill case was one of the two central scandals that durably undermined trust in Credit Suisse. While Archegos was primarily a classic trading and risk-management case, Greensill exposed deep problems in asset management, product control, and the handling of conflicts of interest.
Greensill Capital specialized in supply chain finance, pre-financing suppliers’ invoices and selling the resulting receivables to investors. Credit Suisse packaged these receivables into investment funds and sold them as conservative, short-term investment products.
When Greensill collapsed in early 2021, funds totaling roughly USD 10 billion had to be frozen.
Background: Greensill Capital and Credit Suisse
Greensill Capital was founded in 2011 and presented itself as an innovative financial service provider at the intersection of corporates, suppliers, and capital markets. It promised more efficient supply chain financing while offering investors stable returns at low risk.
The relationship with Credit Suisse developed from the mid-2010s onwards. Within the bank, asset management in particular played a central role. Credit Suisse became not only a distribution partner but also a key growth driver for Greensill by enabling access to institutional investors.
Over time, a close economic interdependence emerged: Credit Suisse managed funds that relied almost exclusively on receivables structured by Greensill, provided loans to Greensill itself, and supported strategic projects such as a planned IPO.
The supply chain finance business model
Supply chain finance is, in principle, a simple concept. Suppliers issue invoices to large companies and receive cash earlier when a financial intermediary pre-finances the invoice. In return, investors earn a return that arises from the customer’s later payment.
Important for non-specialists: in its classic form, this model is based on real, short-term invoices from creditworthy companies. The risk is therefore considered limited as long as the debtors pay reliably.
Greensill went a step further. In addition to existing invoices, the company increasingly financed so-called “future receivables”—revenues that were expected to arise only in the future. Economically, these structures resembled less traditional trade finance and more unsecured corporate loans, materially increasing risk.
Credit Suisse’s supply chain finance funds
From 2017, Credit Suisse launched several supply chain finance funds that invested almost exclusively in receivables arranged by Greensill. The funds grew quickly and, by 2020, managed around USD 10 billion for roughly 1,200 professional investors.
The funds were positioned as liquid, low-risk products with short duration. Many investors saw them as an alternative to money market funds. In reality, risk depended heavily on the quality of the underlying receivables, concentration in individual debtors, and the continued validity of credit insurance.
A significant portion of the receivables was insured against default. These policies conveyed additional safety—however, only as long as they actually existed and were renewed.
Structural risks and warning signs
Several risk factors intensified over time:
A central problem was concentration in a small number of debtors, especially the GFG Alliance. A substantial part of the funds therefore depended indirectly on the financial condition of a single industrial conglomerate.
There was also strong dependence on credit insurers. Much of the perceived safety was based on insurance coverage. If it fell away, the funds’ risk profile changed abruptly.
In addition, Credit Suisse relied to a large extent on credit assessments performed by Greensill itself. Independent internal reviews were limited. At the same time, conflicts of interest existed because the bank was both fund provider and lender as well as Greensill’s strategic partner.
The collapse in spring 2021
In early 2021, the decisive break occurred. The most important credit insurer stopped extending coverage for new receivables. At the same time, the funds’ largest debtor—the GFG Alliance—came under increasing financial pressure.
Without insurance and amid growing doubts about the receivables’ value, confidence in the funds collapsed abruptly. On 1 March 2021, Credit Suisse suspended trading in all supply chain finance funds to prevent further outflows.
Only a few days later, Greensill Capital filed for insolvency. It became clear that a large portion of the funds’ investments was not liquid on a short-term basis.
Credit Suisse’s role
In the Greensill case, Credit Suisse played several roles at once. The bank was fund provider, asset manager, distribution partner, lender, and strategic adviser to Greensill.
This multi-role setup created significant conflicts of interest. Internal concerns about granting a loan to Greensill were overruled. At the same time, oversight of fund risks remained fragmented because responsibilities were split across business lines.
The case showed that formal processes existed, but their independence and enforcement power were insufficient.
Consequences for investors, markets, and management
Around USD 10 billion in fund assets were frozen. Repayment to investors stretched over years and involved significant uncertainty. By 2024, large parts had been returned, but full clarity took a long time to emerge.
The reputational damage to Credit Suisse was substantial. Trust in the bank’s asset management and product control was severely undermined. Several senior leaders were suspended or dismissed, and management initiated a strategic repositioning.
Regulatory and legal consequences
Regulators in several countries investigated the Greensill case. Switzerland’s FINMA identified severe deficiencies in organisation, governance, and risk control and ordered corrective measures.
In Germany, the case led to the insolvency of Greensill Bank. Further investigations were initiated in the United Kingdom and the United States, particularly in connection with the GFG Alliance and potential investor deception.
Conclusion
The Greensill case illustrates that supposedly safe financial products can carry significant risks when transparency, independent control, and clear responsibilities are lacking. Delegated credit assessment, high concentration, and unresolved conflicts of interest led to systematic underestimation of risk.
Together with Archegos, Greensill marked a turning point for Credit Suisse—and was a central trigger for the sustained loss of trust that ultimately culminated in the takeover by UBS.