Abstract
The most depressing thing about the crushing of Barings is that while the bank’s derivatives exposure had reached for the stars its top management believed that it had finally discovered a risk-free way of making profits. The bank assumed more and more exposure to options and other derivative financial instruments, while the evaluation of assumed risk was fuzzy or nonexistent. Toxic waste was interpreted as a sound investment and a secure good fortune—till all hell broke loose.
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Notes
Joseph Wechsberg, The Merchant Bankers (London: Weidenfeld and Nicolson, 1967).
John Clapham, The Bank of England: A History, 1694–1914, Vol. 2 (Cambridge: Cambridge University Press, 1945).
Judith H. Rawnsley, Total Risk: Nick Leeson and the Fall of Barings Bank (New York: Harper Business, 1995).
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© 2015 Dimitris N. Chorafas
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Chorafas, D.N. (2015). Barings: The Crashing of a Venerable Bank. In: Business Efficiency and Ethics. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137484253_9
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DOI: https://doi.org/10.1057/9781137484253_9
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-349-50341-4
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