Question 1 (18 + 2 marks) -Risk Management in banking

This is a research question, please assist.

Students are required to research Barings Bank and its former trader, Nick Leeson, who was convicted and jailed for 612 years for engaging in a series of unauthorised, risky trades that went sour in 1995, causing losses of $1.3 billion.

Note to student:

Further research (i.e. consulting sources other than your Study Guide) will be necessary for you to answer this question. Please remember to acknowledge your sources, as a total of two (2) marks will be allocated as follows to full and correct referencing:

• One (1) mark for correct/proper in-text referencing, as per the Harvard style of referencing.

• Please note that this question cannot be marked if no references have been provided, as the marker will be unable to verify the information.

  Furthermore, ensure that you do not plagiarise by simply copying the information into your assignment. In both instances, a mark of zero (0) will be awarded for the whole question. Moreover, do not use Wikipedia as a source. Rather use articles with recognisable authors and publishing dates.

  Based on your research, as stated above, answer the following questions:

1. 1.1 In your own words, state the primary reasons behind the collapse of Barings Bank. Motivate your answer. (6)