1. Case study :
The Collapse of
Barings Bank
NAME OF GROUP MEMBERS :
1) MOHD HELMI BIN ABDUL SAMAD 205348
2) NG WEI SYNN 206833
3) FARAH ATIQAH BINTI ABD LATIP 214299
4) SITI NURIDAYU BT MOHAMAD KAMAR SHAMSUDIN 214483

2. Introduction
This hit came
The demise of
principally from
the bank was
Barings a hit on a long
brought about
Bank (1762 to position in the
as a result of the
1995) was the Nikkei 225
actions of a
oldest merchant futures of
derivative
bank in London national value
trader, Nicholas
until its collapse around $7bn on
Lesson,
in 1995. the Osaka and
stationed in
Singapore
Singapore.
Exchange.

3. Events : Baring Futures Massive Losses
Singapore (BFS) Operational
risk
Leeson's unauthorized trading activities.
Discrepancy was not discovered earlier.
Poor internal controls and managerial confusion.
The understanding of BFS’s trading activities was
insufficient.
Poor risk management (Market risk, Credit risk)

4. The failure of internal Lack of understanding
control on derivatives business
Issues or
warning sign
Failure to honor the
Error account duties or responsibilities

5. The role management/ regulators
“regulatory culture” having
The regulators not being conducive to minimum risk
cannot stop rogue communication
traders from between regulators in management
trying to fool
different countries - standards for
reflecting competition every branch
banks internal between different
control countries financial irrespective of its
exchanges size and volume
4 PRIMARY RESPONSIBILITIES
CHARTERING REGULATE
SUPERVISE EXAMINATION

6. Banks are
The Front and better
Raised the
manager back office capitalized
standards which makes
should operations are
of internal them less
aware carried out
controls independently
likely to
about collapse in
and from each
the case of future
compliance other
workers rogue trader
strikes

7. Lack of
internal
checks and
balance
Clear Event that
separation
of duties
should be understanding
Lack of the
are avoided in of the business
essential
the future
Poor
supervision of
employees