Barings Bank
Quick Summary
Barings Bank, Britain's oldest merchant bank, collapsed on February 27, 1995, due to approximately £830 million in losses incurred by a single employee, Nick Leeson. Founded in 1762 by Francis Baring, the bank had a long history, financing ventures like the Louisiana Purchase and managing finances for the British royal family.12
By the late 20th century, Barings' culture allowed for lax oversight. Leeson, a 28-year-old trader in Singapore, operated without direct supervision, uniquely positioned to manipulate vast sums of cash. He hid significant losses in a special account, which ballooned after the Kobe earthquake in January 1995 caused the Nikkei index to crash. Leeson fled Singapore, leaving behind losses of S$2.2 billion. Barings was subsequently sold to the Dutch company ING for a nominal sum, ending its independent existence.12
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