Banking Essay Example | Topics and Well Written Essays - 2500 words

Banking - Essay Exampleing overtaken by Dutch giant ING for a low-down sum of 1, and exposing the risky environment in which equity corporations scale catastrophic limits in order to grant a quick profit.At the heart of the devastating scam was a person with a enormous appetite for risk-taking but hardly any accountability towards the bank, Nick Leeson. Overnight, the unscrupulous futures trader from London who was previously the poster boy for Barings high-growth earnings from Singapores premium monetary exchange, SIMEX (In 1993, he documented approximately 10% of the banks profits in futures trading), took special advantage of the banks exposure in not being able to hedge the risks that come with dealing in a care as sensitive as this.This is what happened. Nick Leesons job as Chief Trader at SIMEX was to buy and sell the simplest kind of derivatives pegged to the Nikkei-225 stock exchange of Japan. This job entails the methodology of a skilled bookmaker who basically, bets on what people are likely to bet on in the future course. Despite meshing profits on various occasions, some of Leesons predictions proved incorrect. The idea to fool the bank steering in covering up details of unsuccessful tradings came from devising an unaudited bank account, called error account 88888, to fixing 20,000 goofed up by an inexperienced team member, which was later to serve as Leesons personal pickup arm in covering up failed investment strategies. Even as the entire audit team of Barings was unbroken in dark about what was the tip of the iceberg then, Leeson managed to document account losses which were initially at 2 million in 1992 to an astronomical figure of 208 million by 1994.The final blow