A fall into a pit, a gain in your wit: The Greensill's collapse

Shirley Huang and Xiao Xu

Risk Management and Insurance Review, 2025, vol. 28, issue 3, 382-397

Abstract: The complexity of risk management arises from the diverse and interconnected risks that organizations face, requiring comprehensive strategies and tools to effectively identify, assess, mitigate, and monitor them. As a critical organizational function, risk management facilitates risk‐informed decision‐making that balances risk‐reward trade‐offs, minimizes unnecessary exposure, and strengthens resilience in the face of uncertainty and disruptions. Given the inherent uncertainty of future events, the analysis of historical failures is essential to understand the root causes and consequences. This process helps ensure that lessons learned inform future innovations and strategic responses to similar challenges. The collapse of Greensill Capital is a notable example of the complex interconnections within the financial sector. The case reveals how the actions and decisions of various entities, including finance companies, investment banks, institutional investors, insurance providers, and regulators, collectively contributed to the Greensill's downfall. It illustrates systemic vulnerabilities that can arise within interconnected financial systems and the cascading effects of risk mismanagement. Through the case study, we examine a real‐world failure, apply theoretical concepts, strengthen critical thinking skills, and gain valuable insights into effective risk management practices.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/rmir.70017

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:rmgtin:v:28:y:2025:i:3:p:382-397

Access Statistics for this article

Risk Management and Insurance Review is currently edited by Mary A. Weiss

More articles in Risk Management and Insurance Review from American Risk and Insurance Association
Bibliographic data for series maintained by Wiley Content Delivery ().