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The most significant financial event in the month of February 1995 was the collapse of Barings PLC, the world's oldest merchant bank. What was more significant was that the collapse was brought about directly by the trading activities of one person, Nick Leeson. The losses of Barings PLC amounted to over US$1 billion, more than double its total assets. In March 1995, most of Barings was bought over by ING, Internationale Nederlanden Groep NV, the largest financial service company in The Netherlands.
Lesson was finally extradited to Singapore, tried on charges of fraud in connection with the great deal of trading he committed while he was working as the chief trader and general manager of Barings Futures Singapore, and sentenced to six-and-a-half years in jail.
Legal issues aside, the author, Peter Zhang, has attempted to write a layman's book, explaining how the massive financial losses occurred and how a well established bank such as Barrings could go under in a few days. He does this in the parts in the book. Part I first describes the events that took place mostly in January and February 1995. It then provides some brief historical background to the Barings bank. It was intending to note that the Barings family which started the bank was originally from The Netherlands. The purchase by ING inspired the author to pen, 'from Dutch thou comest and to Dutch returnest'. Although the book was not meant to be about financial history, the introductory notes were excellent in giving some perspective to the events and in highlighting the helpless weight of the situation which foiled the attempt of the Bank of England to rescue the institution.
Part II contains four chapters covering an elementary introduction to futures and options. The purpose of these chapters is to provide the uninitiated reader with basic knowledge of the trades in order to...