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Rogue Trading within Bank Industry about:(Nick Leeson)
Finance & Accounting
Pages 10 (2510 words)
Rogue Trading within Bank Industry about:(Nick Leeson) Contents Contents 2 1.Introduction 3 1.1.Aims and Objectives 3 2.Review of Literature 4 2.1 The Mechanism and Impact of Rogue Trading 4 3.The Case of Nick Leeson and Collapse of Barings Bank 5 4.Major Causes and Implications of Barings Bank Collapse 7 5.Initiatives by Regulating Authority against Rogue Trading 8 6.Research Methodology 10 7.Findings 10 8.Conclusion 11 9.Recommendations 11 Bibliography 12 1.
Among these rogue trading is also a kind of corporate scandal and hurt shareholders’ and investors’ interests (Tulder and Zwart, 2006, p.174-175). After the bankruptcy of Barings bank in 1995, the rogue trading has become a major issue for the entire corporate world and for the capital market efficiency. Since 1995 till date, there have been nearly eight to nine instances of big losses due to the rogue trading, and among this rogue trading in banking industry has been the most frequent one. The collapse of Barings Bank of UK in 1995 was due to Nick Leeson, who took an arbitrage position in Nikkei 225 future contracts and lost $1.4 billion whereas the bank’s capital was only around $600 million. This paper will present the case of Nick Leeson as to how he brought down one of UK’s oldest banks and the inefficient role played by regulators. 1.1. Aims and Objectives In order to conduct a focused research through discussion and analysis, a set of objectives have been determined considering area of this research topic. To discuss the bankruptcy of Barings Bank as a result of rogue trading by its employee Nick Leeson. ...
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