Shadow Banking Entrepreneurs Seek Less Disastrous Way To Relieve Banks Of Illiquid Assets

Get in at the ground floor.
By Matthew Bowden ( [Attribution], via Wikimedia Commons

via Wikimedia Commons

Building the world’s largest structured investment vehicle worked out pretty well for Gordian Knot’s Stephen Partridge-Hicks and Nicholas Sossidis, but somewhat less well for the global economy. Now, they’re ready to help clean up the mess they helped make possible.

They are on the verge of launching a fundraising, seeking $250m to back their new venture: a relatively simple bank, First Global Trust, that aims to help unwind some of finance’s persistent contortions.

First Global Trust, which was approved by UK regulators in April, wants to become a repository for the illiquid assets that are clogging up both central banks and commercial banks, preventing them from lending to mainstream customers. It will take corporate deposits and use them to buy assets such as securitisations, which have had their price and liquidity distorted by central bank buying and ultra-low interest rates.

Born again bankers step out from the shadows [FT]