BusinessCorporate FinanceHSBC warns of debt collapse

HSBC warns of debt collapse

HSBC chairman Stephen Green warns that credit glut could 'end in tears'

The chairman of HSBC, the UK’s largest bank, has warned the excessive
leverage underpinning so many deals could ‘end in tears’ if a major deal
collapses.

In an interview with the FT Stephen Green said he was ‘worried by the degree
of debt in some big ticket transactions nowadays’ and that something was going
‘end in tears’.

Green’s comments follow similar warnings from 3i head
Philip Yea and Alchemy Partners boss Jon Moulton
, and come as private equity
faces intense scrutiny from unions and MPs over the use of debt to fund
takeovers.

Green also warned that in the event of a collapse, a corporate recovery would
be very difficult because risk had been parcelled out to so many parties.

He did say, however, that a single major insolvency was ‘unlikely’ to
question ‘the solvency of one particular institution or even the viability of
the whole system’.

Further reading:

Enter our Green Accountancy Survey to win £50 of wine

Related Articles

Grant Thornton recruits new corporate finance partner

Accounting Firms Grant Thornton recruits new corporate finance partner

10m Emma Smith, Managing Editor
Total fraud value at £2bn five-year high, finds BDO

Accounting Firms Total fraud value at £2bn five-year high, finds BDO

11m Stephanie Wix, Writer
MHA MacIntyre Hudson appoints corporate finance director

Accounting Firms MHA MacIntyre Hudson appoints corporate finance director

11m Stephanie Wix, Writer
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
KPMG announces senior partner promotion in Newcastle

Accounting Firms KPMG announces senior partner promotion in Newcastle

11m Stephanie Wix, Writer
Independent city firm reports 70% growth

Accounting Firms Independent city firm reports 70% growth

11m Stephanie Wix, Writer
Tax avoidance crackdown sees 80% jump in additional HMRC revenue

Accounting Firms Tax avoidance crackdown sees 80% jump in additional HMRC revenue

11m Stephanie Wix, Writer
Making Tax Digital: the "unexpected item in the bagging area"

Accounting Standards Making Tax Digital: the "unexpected item in the bagging area"

11m Stephanie Wix, Writer