Barings Bank became the biggest failure in British banking history after rogue trader Nick Leeson’s losses caused its 1995 collapse.
Leeson worked for Barings Futures Singapore and traded Nikkei 225 futures and options on the Singapore International Monetary Exchange and Osaka Securities Exchange. He hid losses in an error account and continued making increasingly large bets in an attempt to recover them. The Kobe earthquake in January 1995 contributed to further market movements against his positions.
By February 1995, the losses had overwhelmed the bank’s capital. Barings, founded in 1762, was declared insolvent and was bought by ING for one pound. The case became a classic warning about weak internal controls, inadequate supervision, and the dangers of separating trading from settlement oversight.