An Overview Of Barings Bank

1066 WordsAug 17, 20155 Pages
➢ Overview of Barings Bank Barings Bank was founded in 1763 and known as the oldest merchant bank in London until its collapse in 1995. The bank not only accepted deposits and provided financial services to its clients but also traded on its own account. Over the years it became quite successful and in 1980 it set up brokerage operations in Japan. Soon after, it expanded its operations to include a handful of other Asian countries and in 1992 it activated its seat on the SIMEX (Singapore International Monetary Exchange) with Nick Leeson as general manager. However, Leeson used his position to engage in both fraudulent behavior and risky speculation on futures and options, and ended up losing £1.4 billion of the funds capital, which finally caused the bank’s insolvency in 1995. Barings bank was purchased by, the Dutch bank, ING for the nominal price of £1. ➢ Problems began. In early 1990’s, derivative is rapid growth financial instrument around the American and European markets even the Asia-Pacific region. Barings Bank began to invest in the arising Singapore market in order to become one of the first active bankers in the derivative market. Soon, they owned a seat on the SIMEX. Because of the missing expertise in futures and options, they didn’t activate that seat at first. In March 1992 Barings Bank activated its seat and appointed Nick Leeson, a former Morgan Stanley back office employee, as general manager. He took charge of the settlements and accounting
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