The last post of Financial Regulation Matters looked at the then-ongoing crisis at Carillion ; now we know that the firm could not survive the crisis , with the situation being that an official receiver was appointed to liquidate the company immediately . Whilst this author is not of the habit of agreeing with Andrew Adonis, his recent likening of the situation to the Enron scandal , in terms of the extent of the scandal and who it will ensnare as it develops, seems to be an accurate depiction; our old friends KPMG are currently being scrutinised for providing positive audits just months before the firm spectacularly collapsed – no doubt, many financial (and political) players will be implicated as this remarkable corporate collapse continues to come to light. However, whilst Carillion and the collapse will be revisited in this blog and, no doubt, fill the business media for weeks to come, this post will take a different approach and use the story to better understand a different...

In November we discussed the impending crisis at Carillion, the large-scale construction business that has become intertwined with the U.K.’s economic future, by way of projects like HS2 – the large scale infrastructure project that is designed to herald a new era for the different parts of the U.K. by linking them together by high-speed rail networks. In this post, we will get an update on proceedings in this particular case because, as predicted, the situation is worsening by the day and the realisation that Carillion could collapse moves closer and closer as each stage of the rescue-process fails. Whilst the same points will be repeated i.e. the danger of such a collapse for an intertwined company, a new emphasis will be placed upon a potential ‘bail-out culture’ that may emerge as the U.K. heads into unchartered and particularly choppy waters post-Brexit. At the moment, almost 200 creditors are engaged in negotiations regarding Carillion’s future , with analysts suggesting t...

Here in Financial Regulation Matters we have looked at the issue of personal debt before, with posts ranging from the ever-growing crisis to the predatory lending that exists within the sector. In today’s post, we will be looking at the figures that have been released by a blog for Bank of England (BoE) staff – it is not a usual blog, but a vehicle for BoE staff to openly discuss certain policies and aspects that affect policies – that describe how the situation for everyday consumers is a cyclical, almost hopeless process that many stay trapped in for decades. This analysis will be counteracted by the news stories that receive plenty of attention in the media, with the aim being to illustrate how consumer confidence is almost enshrined within the modus operandi of the system , even in the face of opposing, and often devastating facts. The news has been awash recently with stories about consumers operating more shrewdly in the credit markets (in relation to switching between...

Today’s post reacts to the news that broke this evening concerning the massive accountancy (and advisory) firm KPMG’s withdrawal from the inquiry into the Grenfell Tower fire that occurred last June. Whilst this post will not discuss the Grenfell Tower disaster in any great detail – mostly because it is an extremely emotive subject but also because the Inquiry still has some way to go before concluding – it is worthwhile looking at two specific instances: the most important is to look at why KPMG today released a statement that it had ‘ mutually agreed with the inquiry that we will step down from our role with immediate effect ’, but it is also worth asking why KPMG was considered an appropriate source of advice in the first place – does the firm’s track record, particularly in the modern era, reveal for us the processes underpinning this most important of inquiries? KPMG is one constituent part of the so-called ‘Big Four’ – the oligopolistic partners within the accounting indus...