Barings Bank was Britain's oldest merchant bank, having financed governments and wars since 1762. In the 1990s it gave a young derivatives trader named Nick Leeson increasing autonomy in its Singapore office, where he was meant to be executing low-risk arbitrage trades.
Leeson instead made increasingly large unauthorized bets on the Japanese stock market, hiding the mounting losses in a secret error account. When the Kobe earthquake sent Japanese markets tumbling in January 1995, his losses spiraled past £800 million — more than the bank's entire capital.
Barings collapsed within days and was sold to Dutch bank ING for the symbolic sum of £1. Leeson was sentenced to six and a half years in a Singapore prison. The 233-year-old institution's name disappeared from the City of London within months.
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