The second incident was the solo-consolidation of Baring Securities Ltd and Baring Brothers & Co. This allowed them to be treated as one entity for capital adequacy and large exposure purposes. This meant Leeson had access to a larger amount of capital. The Bank of England found the process of solo-consolidation to have been too informal and the results to have facilitated Leeson’s fraudulent activities.
6. Why was Barings Bank willing to transfer large cash sums to Barings Futures Singapore?
Barings Bank believed that the large cash sums transferred to Barings Futures Singapore was for loans tocustomer's as portrayed on the Barings Futures Singapore balance sheet.
7. Why did the attempt by the Bank of England to organize a bailout for Barings fail?
The attempt by the Bank of England to organize a bailout for Barings failed because no one would assume thecontingent risk of additional, but as yet undiscovered losses.