Barings Bank


DEFINITION of 'Barings Bank'

A British merchant bank that was started in 1762, and for centuries was considered the largest and most stable bank in the world. In 1995, Barings - then the oldest bank in Britain - collapsed after it was unable to meet its cash requirements following unauthorized speculative trading in derivatives at its Singapore office by then-trader Nick Leeson.

BREAKING DOWN 'Barings Bank'

Leeson, acting as a rogue trader, accumulated well over $1 billion in losses, which eventually led to the bank's collapse. Barings Bank was purchased by ING for £1.00 shortly after it was determined that the bank did not have enough capital on hand to cover its debts.

  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Nick Leeson

    A former manager with England's Barings Bank, Leeson became a ...
  3. Speculation

    The act of trading in an asset, or conducting a financial transaction, ...
  4. Merchant Bank

    A bank that deals mostly in (but is not limited to) international ...
  5. Hubris

    The characteristic of excessive confidence or arrogance, which ...
  6. Rogue Trader

    A trader who acts independently of others - and, typically, recklessly ...
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