CONFIRMED
Nick Leeson and the Rogue Trader Who Broke a 233-Year-Old Bank
Barings Bank was an institution almost synonymous with British financial respectability. Founded in 1762, it had financed the Napoleonic Wars and the Louisiana Purchase, served the British monarchy, and survived for 233 years as one of the City of London's most venerable merchant banks. In February 1995, it ceased to exist — destroyed not by war or recession but by a single trader on the other side of the world. Nick Leeson, a 28-year-old from a working-class background, ran Barings' futures-trading operation in Singapore, and he appeared to be a star, generating spectacular profits that made him one of the bank's most valued employees. In reality, he was concealing catastrophic losses in a secret error account numbered 88888, doubling down again and again on losing bets that the Japanese stock market would stay stable. The bank's management, dazzled by his apparent success and failing utterly to supervise him, kept sending him money to cover his positions, believing it was funding profitable trades. Then, on 17 January 1995, a massive earthquake struck the Japanese city of Kobe, sending the Tokyo market into turmoil and turning Leeson's enormous bets disastrously wrong. As the losses ballooned past the bank's entire capital — ultimately around £827 million — Leeson fled, leaving a note that read 'I'm sorry.' Within days, Barings was bankrupt, sold to a Dutch bank for one pound. This article tells the story of how one unsupervised young man, a hidden account, and an earthquake brought down a bank that had stood for nearly two and a half centuries — and what it revealed about the dangers of trading without control.
