You may ask, “What well-managed bank would allow its chief trader to
be in charge of the back office, as well?” The answer is easier to understand
once you realize that, initially, Barings’ Singapore branch was supposed to
be executing orders placed exclusively by Barings affiliates worldwide on
behalf of their customers. It was some time afterward that BFS also began to
conduct independent arbitrage transactions, but from the standpoint of Barings
London, this new line of business posed no major security breach. BFS
was not supposed to be involved in any trading for the house’s account, so
Barings’ management might have reasoned that any loss of control by putting
Leeson in charge of the front and back offices was offset by the cost savings
of having one person cover two tasks.