The Sixth Great Power vs. The Rogue Trader: The Collapse of Barings Bank
pplpod · pplpod
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Show Notes
In this episode of pplpod, we look at the spectacular destruction of Barings Bank, the oldest merchant bank in London. Founded in 1762, Barings was once so influential it was dubbed the "sixth great European power", financing history-shaping events like the Louisiana Purchase and the War of 1812.
But in 1995, a dynasty that survived the Napoleonic Wars was brought down by a single employee: Nick Leeson. We discuss how Leeson, a trader in Singapore, used a hidden error account—number 88888—to conceal massive losses from unauthorized futures trading. We cover the failure of internal controls that allowed him to act as both chief trader and settler, the disastrous bet against the Nikkei following the Kobe earthquake, and the chaotic week that ended with the bank being sold to ING for just £1.