Why Did Barings Bank Fail?
One Trader in Singapore Killed a 233-Year-Old Bank
📜 What Happened
Barings — Britain's oldest merchant bank, financier of the Louisiana Purchase, banker to the Queen — let 28-year-old Nick Leeson run BOTH trading and back-office settlement in Singapore. He hid losses in error account 88888, doubled down repeatedly to trade his way out, and forged documents to cover margin calls. The Kobe earthquake shattered his positions: £827M in losses, twice the bank's capital. Barings sold to ING for £1.
☠️ The Fatal Mistake
One person controlled the trades AND the books that verified them — the fraud wasn't clever; the missing separation made it inevitable.
🧠 The Lesson (Free for You)
Never let anyone check their own homework — including you. Controls aren't distrust; they're the architecture that keeps one bad month from becoming extinction.
📕 The Antidote Book
A Black Swan has three properties: it's an outlier beyond regular expectations, it carries extreme impact, and — the cruel joke — we retrofit explanations afterward making it seem predictable. Taleb's assault on modern…
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