Stephen Fay's book The Collapse of Barings
joins a growing list of contemporary accounts of the banking scandal that brought down England's most prestigious investment bank. The financial calamity that Nicholas Leeson unleashed through his unauthorized trading was so grand in scope that the story seemed likely to be of great interest as well. A story about a "rogue trader" in Singapore who could destabilize finances worldwide and bring down the Queen's bank has so many angles worthy of exploration, from the character of Leeson to the technology that made it possible, from the history of Barings to the nature of global finance, that you can't blame writers for rushing in to chronicle it. But with Leeson's own tell-all tome Rogue Trader
, and the excellent account Total Risk: Nick Leeson and the Fall of Barings Bank
by Judith H. Rawnsley, as well as a fascinating chapter on the Barings scandal in Martin Meyer's book The Bankers: The Next Generation
, the story has largely been told. Nevertheless, Stephen Fay is an excellent business writer, and his book is an adept study of Leeson and the damage he did to banking and Barings. Fay pays particular attention to the British reaction to the Barings collapse and uncovers anglophile angles previously overlooked. Those looking for another take on the Barings scandal or an exhaustive collection of Barings books will snatch this book up with no regrets.
From Publishers Weekly
Fay-a British journalist, financial editor and author of a book on the Bank of England-takes a close look at Barings Brothers, one of England's most prestigious banks (used by the Queen) and how it went bust after a young employee working out of its Singapore office managed to "lose" #860 million over 32 months without anyone apparently being the wiser. Fay gives a brisk history of the bank, founded in 1762, as well as a crash course on modern investment and speculation practices, with admirably understandable explanations of such terms as derivatives, short-straddle futures, swaps and cross-trading. He then turns to Nick Leeson, from a working-class suburban London family, who didn't have good enough grades to get into a university but who beat the speculators at their own game. He details, and documents, Leeson's complicated financial manipulations and argues that the trader's claim that he slipped into the scheme by accident, while putting right other people's mistakes, is untrue. Also covered are the shocking ineptness at Barings, the social divisions within the company, the confusion in financial circles after Leeson was caught in early 1995 and the inability of the Bank of England to save Barings. As a reporter, Fay is both concise and clear, and he has a nice eye for odd details, such as London's leading bankers meeting at the Bank of England in panic over the Barings collapse and sending out for pizza.
Copyright 1996 Reed Business Information, Inc.