Events leading to the collapse of Barings Bank The activities of Barings Bank in Singapore between 1992 and 1995 allowed Nick Leeson to operate effectively without the supervision of Barings Bank in London. Leeson acted as both head of settlement operations (responsible for ensuring accurate accounting) and floor manager for Barings' trading on the Singapore International Monetary Exchange (SIMEX), although the positions would normally have been filled by two employees. This placed Leeson in the position of reporting to an office within Barings Bank which he himself held. Several observers (and Leeson himself) placed much of the blame on the bank's poor internal audit and risk management practices. Due to the absence of oversight, Leeson was able to make seemingly small bets in the futures market and cover his shortcomings by reporting losses as gains at Barings in London. Specifically, Leeson modified the branch's error account, later known by account number 88888 as the "five-eight account", to prevent the London office from receiving the standard daily trading, price and status reports. Leeson claims the losses began when one of his colleagues bought contracts when he should have been selling them. Using the hidden "five-eight account", Leeson began aggressively trading futures and options on SIMEX. His decisions regularly caused him to lose large sums, but he used the money entrusted to the bank by branches for use in his own accounts. He falsified transaction records in the bank's computer systems and used the money intended for margin payments on other transactions. Management at Barings Bank in London initially congratulated and rewarded Leeson for what appeared to be his exceptional trading profits. However, his luck ran out when the Kobe earthquake sent Asian financial markets into a tailspin. Leeson bet on a quick recovery in the Nikkei Stock Average that failed to materialize. At this point, Barings Bank auditors finally discovered the fraud, around the same time that chairman Peter Barings had received a confession note from Leeson, but it was too late. Leeson's activities had generated losses totaling £827 million ($1.4 billion), double the bank's available trading capital. The Bank of England attempted a bailout over the weekend but was unsuccessful. [2] Barings was declared insolvent on 26 February 1995. The collapse was dramatic, as employees everywhere were supposed to receive their bonuses which were suddenly withheld. Barings was purchased by the Dutch banking/insurance company ING for the nominal sum of £10 together with the assumption of all liabilities of Barings.