Abstract

The case discusses how Nicholas William Leeson’s (Leeson) unauthorized trading in derivatives led to the fall of Barings Bank, the oldest and one of the most reputed banks in the UK. It describes the complete sequence of events leading to the fall of the bank. The case also highlights the reasons for the fall, including the lack of proper managerial supervision and operational control systems, and the mismanagement of the bank’s derivatives operations.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Importance of proper supervision and control systems in a bank.

Keywords

Nicholas William Leeson's, unauthorized trading, derivatives, Barings Bank, UK, managerial supervision, operational control systems, mismanagement, derivatives operations