Twenty years after bringing down a major British bank, Nick Leeson is sounding alarm bells about China. Unless the country reforms its stock markets, he warns, it's only a matter of time until his earlier disaster repeats itself on a larger scale.
In 1995, Leeson was a 28 year-old master of the universe wannabe running a trading desk in Singapore for Barings Bank. When markets turned against him, he tried to hide his losses with unauthorized trades — trades that were enabled by the lax oversight on Singapore's then-underdeveloped exchanges. Eventually, Leeson's losses mushroomed to $1.4 billion, shaking world markets and toppling a 223-year-old bank that held an account for Queen Elizabeth. (Leeson ended up in jail, where he wrote a book about his experience called "Rogue Trader.")
Leeson is now warning that another Asian market could be ripe for similar manipulation. "In Singapore it was all about systems not being there to handle the volumes that were coming in," Leeson, now 48, told the South China Morning Post this week. In that sense, he suggests, 1990s Singapore bears a close resemblance to today's China.
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