Nicholas (“Nick”) William Leeson was relaxing at a luxury resort in Malaysia when he heard that Barings Bank PLC, 1 Britain’s oldest bank, had lost $1.2 billion (£860 million) and was in administration (i.e., Chapter 11 bankruptcy). He was shocked, but Leeson should not have been: it was his mas- sive speculative losses on the futures market over a brief three-year period that wiped out the net worth of this ven- erable bank.
Leeson worked at the Singapore branch of Barings Bank PLC, the blue-blooded British merchant bank founded in 1763 that catered to royalty and was at the pinnacle of the London financial world. Among its many accomplishments over the centuries, Barings financed both the Louisiana Pur- chase in 1803 and the Napoleonic Wars. But the road to suc- cess was not always smooth. The bank endured both wars and depressions, and it overcame near-bankruptcy in 1890, surviving only because it was bailed out at the last minute by the Bank of England. In spite of these sporadic periods of turmoil, Barings was always one of the most well-placed