Subject category:
Economics, Politics and Business Environment
Published by:
International Institute for Management Development (IMD)
Version: 31.01.96
Abstract
Designed as an overview of the spectacular collapse of a prestigious financial institution, this case outlines the history of Barings Bank, the oldest merchant bank in London, describes how it became involved in Far East markets and how a trader in its Singapore operation, Nick Leeson, was able to run up massive losses on unauthorised dealings which led to the collapse of the bank. The case identifies areas of poor internal control, inadequate board oversight and a remuneration culture that encouraged risk taking. It looks at the role of both internal and external auditors and of the regulatory authorities.
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Abstract
Designed as an overview of the spectacular collapse of a prestigious financial institution, this case outlines the history of Barings Bank, the oldest merchant bank in London, describes how it became involved in Far East markets and how a trader in its Singapore operation, Nick Leeson, was able to run up massive losses on unauthorised dealings which led to the collapse of the bank. The case identifies areas of poor internal control, inadequate board oversight and a remuneration culture that encouraged risk taking. It looks at the role of both internal and external auditors and of the regulatory authorities.