BARINGS BANK
Sarajevo School of Science and Technology
Economics Department
Postgraduate studies MBA
Topic: Barings Bank Scandal 1995
Professor: Dr. Goran Ridic
Student: Dinka Lujinovic
Sarajevo, 2014
Content
Contents
Introduction 5
Research methodology 6
Nick Leeson 6
Barings Bank 8
Nick Leeson and the collapse of Barings Bank 9
Risk Management and Internal Control 9
Conclusion 12
Reference list 13
Introduction
Barings Bank was established in 1762 by Francis Baring. It was known as John and Francis Baring Company and was one of the oldest merchant banks in United Kingdom. They were sons of John Baring, wool trader of Exeter who was born in Bremen in Germany. The company started in offices of Cheapside and after a certain period of time, it moved to larger quarters in Mincing Lane Barings. At that time Barings slowly changed from wool into many other commodities, providing financial services which were necessary for the rapid growth of international trade. Barings Bank traded on its own account and with other dealers, within British markets as well as in some foreign markets. In addition, Barings Bank has performed as London agents for foreign traders, organizing shipping and insurance, as well as making and gathering payments. During the nineteenth century, Barings scrambled with Rothschilds for managing in the London capital market. In the 1770s, the issuance began and the firm become a performer for British government consuls, when the government needed a financial support to cover the cost of the British war effort in North America. This work was a key principle in the period of French Wars from 1793 to 1815. At that time Barings appeared as the most potential and powerful merchant bank in Europe. Furthermore, Barings faced with a role as a paying agents, and it was related with governments of Argentina, United States, Canada and Russia. Additionally, other foreign clients reached from the Canadian Pacific Railway Co to the Buenos Aires Water
Economics Department
Postgraduate studies MBA
Topic: Barings Bank Scandal 1995
Professor: Dr. Goran Ridic
Student: Dinka Lujinovic
Sarajevo, 2014
Content
Contents
Introduction 5
Research methodology 6
Nick Leeson 6
Barings Bank 8
Nick Leeson and the collapse of Barings Bank 9
Risk Management and Internal Control 9
Conclusion 12
Reference list 13
Introduction
Barings Bank was established in 1762 by Francis Baring. It was known as John and Francis Baring Company and was one of the oldest merchant banks in United Kingdom. They were sons of John Baring, wool trader of Exeter who was born in Bremen in Germany. The company started in offices of Cheapside and after a certain period of time, it moved to larger quarters in Mincing Lane Barings. At that time Barings slowly changed from wool into many other commodities, providing financial services which were necessary for the rapid growth of international trade. Barings Bank traded on its own account and with other dealers, within British markets as well as in some foreign markets. In addition, Barings Bank has performed as London agents for foreign traders, organizing shipping and insurance, as well as making and gathering payments. During the nineteenth century, Barings scrambled with Rothschilds for managing in the London capital market. In the 1770s, the issuance began and the firm become a performer for British government consuls, when the government needed a financial support to cover the cost of the British war effort in North America. This work was a key principle in the period of French Wars from 1793 to 1815. At that time Barings appeared as the most potential and powerful merchant bank in Europe. Furthermore, Barings faced with a role as a paying agents, and it was related with governments of Argentina, United States, Canada and Russia. Additionally, other foreign clients reached from the Canadian Pacific Railway Co to the Buenos Aires Water