Chapter 1423 Investigate Barings Bank! (page 12)

Judging from the development history and current capital flow of Bahrain Bank, this is still a very good international bank.

Although this international bank cannot be compared with Huifeng Bank and Zata Bank.

However, neither Melisi nor Huo Jianning are ordinary people. Now, there are two of them, one is the cabinet general manager of the Imperial Group and the other is the cabinet deputy general manager.

When the boss asked them to investigate all the information of Bahrain Bank in detail, the two men guessed that the boss was interested in this international bank, and they were likely to make an acquisition.

They have been with their boss, Sir Yang, for so long. It can be said that whenever the boss takes action, there must be a reason.

What followed was more and more shocking to Mailisi and Huo Jianning.

Because judging from some of the information displayed above, Barings Bank is not as glamorous as it appears on the surface, and there must be something wrong internally.

Next.

After the two of them got the information respectively, they were really more and more surprised as they read it.

The time came to October 1995, 1.

Thursday.

Meris and Huo Jianning met with their boss in the office of the general manager of the Empire Group headquarters.

"Boss, there is indeed a problem within Barings Bank."

After Merisi finished speaking, he handed the information to Yang Ming.

Yang Ming took the information and recalled the news about the collapse of Bahrain Bank in his previous life.

This incident shocked many people around the world at the time.

At this time, Yang Ming saw the detailed information that Mailliss and Huo Jianning had found, and it turned out to be true.

There were some things that he couldn't figure out before, but now he can't figure them out.

And this involves one of the most critical figures.

Mawson.

Leeson officially came to work at Barings Bank on July 1989, 7.

Prior to that, he was a clerk in the liquidation department of Morgan Stanley Bank. After joining Barings Bank, he quickly secured the opportunity to work in the Indonesian branch.

Because he has patience and perseverance, is good at logical reasoning, and can quickly solve many problems that have not been solved before, which makes his work better. Therefore, he is regarded as an expert in futures and options settlement. The London headquarters has a strong influence on Leeson's work. Indonesia was quite satisfied with his job and promised to arrange a suitable position for him overseas.

In 1992, the Bahrain headquarters decided to send him to the Singapore Branch to establish the futures and options trading department and serve as the general manager.

It can be said that no matter what kind of transaction you do, mistakes are inevitable.

But the key is how you deal with these errors. This is especially true in futures trading.

Someone may mistake a "buy" gesture for a "sell" gesture; someone may buy a contract at the wrong price; someone may not be cautious enough; someone may buy March futures instead of June futures, etc. .

Once a mistake is made, it will cause losses to the bank. After these mistakes occur, the bank must deal with them quickly and properly. If the error is irreversible, the only feasible way is to transfer the error to an account in the computer called an "error account" and then report it to the bank headquarters.

When Leeson worked as a futures trader in Singapore in 1992, Barings Bank originally had an "error account" with the account number "99905", which was dedicated to dealing with errors caused by negligence during the transaction process.

This was originally a normal error account in the operation of the financial system.

In the summer of 1992, Gordon Bowser, who was fully responsible for the liquidation work at the London headquarters, called Leeson and asked Leeson to set up another "error account" to record minor errors and handle them in Singapore by himself to avoid errors. Trouble London job.

So Leeson immediately called Liesel, who was in charge of office liquidation, and asked her whether she could create another file.

Soon, Liesel typed some commands into the computer and asked him what account he needed.

In the culture of Country Z, "8" is a very auspicious number, so Leeson used it as his auspicious number. Since the account must be five digits, the "wrong account" with the account number "88888" was born.

A few weeks later, another call came from the London headquarters, which had been equipped with new computers, requiring the Singapore Branch to continue to act in accordance with the rules, and all error records were still reported directly to London through the "99905" account.

The "88888" error account was put aside just after it was created, but it became a real "error account" stored in the computer, and the headquarters had already noticed that there were many errors in the Singapore Branch, but Leeson did not Cleverly prevarication.

The ignored account "88888" provided Leeson with the opportunity to create false accounts in the future. If this account had been canceled at that time, Bahrain's history might have been rewritten.

On July 1992, 7, one of Leeson's traders, Jin Wang, who had only joined Bahrain for a week, made a mistake: When a client (Fuji Bank) requested to buy 17 Nikkei Index futures contracts, the trader mistakenly sold After 20 moves, the mistake was discovered when Leeson was doing liquidation work that night. To correct this error, 20 contracts must be bought back, which means that based on the closing price of the day, the loss will be 40 pounds and should be reported to the London head office.

However, after various considerations, Leeson decided to use the wrong account "88888" to undertake 40 short Nikkei futures contracts to cover up this mistake.

Another similar mistake was made by Leeson's friend and executor George. Because George was his best friend, Leeson signaled that all 100 September futures he sold were bought by him, worth up to 9 million pounds, and the vouchers for several transactions were not filled out at all.

If George's mistakes were revealed, Leeson would have to say goodbye to his already satisfying life.

It was a piece of cake for Leeson to record George's several mistakes into the "88888 account". But at least three questions troubled him: first, how to make up for these mistakes; second, how to avoid the London headquarters' internal audit at the end of the month after recording the errors in the "88888" account; third, SIMEX asked them to increase margin every day, and they would calculate How much does the Singapore Branch lose every day? The "88888" account can also be displayed on the SIMEX big screen. In order to make up for the mistakes of his employees, Leeson transferred the commissions he earned into the account, but of course the premise was that these mistakes should not be too big, and the amount of losses caused should not be too big, but the mistakes caused by George were indeed too big.

In order to make enough money to recoup all his losses, Leeson took increasing risks and engaged in a large number of straddle trades. Because the Nikkei index was stable at the time, Leeson would earn option premiums from many trades.

If you are unlucky and the Nikkei Index moves violently, this transaction will cause Bahrain to suffer huge losses. Leeson did very well for a while.

到1993年7月，他已将“88888”号账户亏扣的600万英镑转为略有盈余，当时他的年薪为5万英镑，年终奖金则将近10万英镑。

If Leeson stops here, Bahrain's history will also change.

In addition to covering up mistakes in trading, another serious blunder was trying to win over Bonnefoy, Nikkei's largest customer.

In late 1993, for several consecutive days, the market price soared by more than 1000 points in a record-breaking manner every day. The computer screens used for clearing records frequently malfunctioned, and countless transactions were backlogged.

Because the system was not working properly, transaction recording was done manually. By the time various errors were discovered, Leeson's losses had reached nearly $170 million in one day.