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.

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RELATED FAQS
  1. How did derivatives trader Nick Leeson contribute to the fall of Barings Bank?

    When an earthquake shook Kobe, Japan in 1995, it also broke open an ongoing scandal within the walls of Barings Bank. At ... Read Answer >>
  2. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Answer >>
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