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Case Study

The collapse of Barings Bank

By Stewart Hamilton

8 pages

February 1996

Reference: IMD-1-0154

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 unauthorized 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.

Keywords

Collapse, Corporate Governance, Board, Banking

Settings

United Kingdom
1995

Type

Published Sources

Available Languages

English

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