Thursday 20 February 2020

Barings Bank Collapse - February 1995

Barings Bank Collapse – February 1995

25 years ago (on 26th February 1995) Barings Bank, the oldest merchant bank in London, collapsed after its chief trader in Singapore, Nick Leeson lost millions in unauthorised transactions.

Founded as far back as 1762, Barings Bank was among the largest, and was considered to be one of the most stable banks in the world. In 1995 its chief trader in Singapore, Nick Leeson, was found to be a rogue trader making fraudulent, unauthorised and totally speculative moves, losing around £625m.
However from 1992, he was amazingly successful making numerous trades, albeit unauthorised, that made large profits for Barings, accounting for 10% of the bank’s annual profit. But soon enough his judgment became suspect and he started to use an error account to hide the losses that were being accrued.

From a deficit of just £2m in 1992, to £23m in late 1993, by 1994 the amount had spiralled to close on £208m. Every time he lost money, he used a doubling up strategy of further investments in an attempt to get both himself and the bank out of trouble.

The beginning of the end came in mid-January 1995 when Leeson made 2 transactions on the Singapore and Tokyo stock markets essentially hoping that the Japanese market would not move overnight. 

But when the Kobe earthquake hit in the early hours of 17 January, Asian markets plummeted. Leeson reacted making a series of ultra high risk trades in the forlorn hope that the Nikkei Stock Average would recover, but to no avail.

Leeson fled Singapore on 23 February and after a failed bailout attempt, Barings Bank was declared insolvent on 26th February 1995.

Leeson was finally arrested in Frankfurt in November 1995 and was sentenced to a 6 and a half years jail term in Singapore.

Tuesday 18 February 2020

The Cato Street Conspiracy

Building in Cato Street where
the conspirators were found
200 years ago this week (and more than 200 years after Guy Fawkes and the Gunpowder Plot), another attempt was made to murder the serving Prime Minister (Lord Liverpool in this case) and all the British cabinet ministers. 

Known as the Cato Street Conspiracy, it was named after the conspirators’ meeting place in a hayloft located close by to  London's Edgware Road.

On 23 February 1820, England was a country on the brink of revolution. Lord Liverpool led a Tory government which has severely restricted free speech and free assembly while supplying the authorities with greater powers to prosecute critics of their regime. Only 3 weeks into his reign, King George IV was the monarch of a country stricken by austerity and ruled by political turmoil (does this sound familiar at all?).

A group called the Spencean Philanthropists, who took their name from the radical Thomas Spence, spent many months devising their plot which reached its climax at 7.30 in the evening, when 30 men met at a house in Cato Street, ready to walk the short distance to nearby Grosvenor Square. Once arriving at the more fashionable area of the capital, they planned to storm a house where the PM and his aides were having dinner.

Arthur Thistlewood
Led by Arthur Thistlewood, a former soldier, the Cato Street mob planned on one member of the gang knocking at the door with a supposed parcel delivery and when the door was opened, for the group to force entry.

Once the entire cabinet had been murdered, the plan was to decapitate all the members and display them on spikes at Westminster Bridge (especially those of the particularly reviled Foreign Secretary Lord Castlereagh and Home Secretary Lord Sidmouth).

But like Fawkes’ attempt 2 centuries earlier, this attack at the state was foiled from within as Thistlewood’s group was infiltrated by a police spy George Edwards.

Arrest at Cato Street
The Bow Street Runners, London’s first professional Police service, had been watching the premises in Cato Street all day and when all the conspirators had arrived, a battle ensued and with assistance from the Coldstream Guards, most of the gang were arrested at the scene. Thistlewood actually managed to slip away and was actually caught the next morning while sleeping.

In all 13 plotters were charged with treason, with five conspirators being executed and five others transported to Australia.

Other historical factoids this week:

150 years ago: 23 February 1870 - The U.S. state of Mississippi was restored to the Union following the American Civil War.

90 years ago: 18 February 1930 - The dwarf planet Pluto was discovered by American astronomer Clyde Tombaugh.

15 years ago: 18 February 2005 - Hunting wild mammals with dogs was banned in England and Wales. (Hunting foxes with dogs had already been banned in Scotland.)

Famous Deaths

75 years ago:  21 February 1945 - Death of Eric Liddell, Scottish athlete. Olympic gold medalist in 1924 (400m). Because of his religious convictions, he withdrew from the 100m heats because they were held on a Sunday, and entered (and won) the 400m instead as the heats and final were held on weekdays. He was portrayed by the actor Ian Charleson in the film Chariots of Fire.
(Died in a WWII internment camp in China, aged 43.)

30 years ago: 24 February 1990 - Death of Johnnie Ray, American singer, songwriter and pianist. Hugely popular in the1950s, he was known for his early rock and roll style and wild stage persona.

Alf Wight (James Herriot)
25 years ago: 23 February 1995 - Death of James Herriot (real name Alf Wight), British veterinary surgeon and writer who wrote semi-autobiographical stories about his experiences, (All Creatures Great and Small).

20 years ago: 23 February 2000 - Death of Sir Stanley Matthews, British football player.