put it all on red
The banking industry must often think how times flies when you’re enjoying yourself. To my failing and drink-addled mind, it seems only yesterday that a young, fresh-faced trader at the far-flung Singapore outpost of city stalwart, Barings Bank, very nearly brought the whole worldwide banking industry to its knees. In reality, it’s twenty years since Nick Leeson went on the run after losing the company a cool £827,000,000.00 before eventually being caught and spending four years’ at Her Majesty’s pleasure.
When it happened, anyone ‘in the know’ would have believed that the loss of Barings, and subsequent fire-sale of another city beacon, Warburgs, would have marked the end of banking’s traditional undercapitalisation, but they’d have been wrong. With hindsight, Nick Leeson’s actions of 1995 appear to have ushered in an even more frivolous and profligate era rather than call-time on an aged and outdated one. It proved to be only the first of many such cases of traders dealing (gambling?) on a vast, almost unimaginable, scale in little understood products & services, whilst ignorant and/or incompetent managers and regulators have meekly stood by. All have been happy to receive the reward without accepting, acknowledging or even appreciating the risk to the rest of us. History supposedly grants the young witness to the mistakes of the old but it would appear the financial lessons of the past rarely pass from one generation to the next.
