What caused Barings Bank to collapse in 1995?

The collapse of Barings Bank in 1995 was primarily caused by the unauthorized and deceptive trading activities of a single employee, Nick Leeson, based in the bank's Singapore office.12

Leeson exploited a significant lack of internal oversight by simultaneously managing both the "trading" and "settlement" functions of his office. This structure allowed him to commandeer large sums of cash from London and manipulate financial reporting to hide mounting losses in a secret account, known as "88888".1

Driven by the pressure to generate profits for bonuses, Leeson engaged in high-risk speculative trading on the Nikkei index. When the Kobe earthquake caused the market to crash, his losses escalated rapidly. Unable to meet margin calls, Leeson attempted to recover by doubling his bets, ultimately accumulating losses of approximately £830 million (S$2.2 billion). The bank, unable to absorb these losses, went into administration and was subsequently sold to ING for a token £1. This event serves as a prominent example of white-collar crime, characterized by the abuse of trust and the use of deceit for illicit financial gain.12