Premium Essay

The Collapse of Barings Bank

In: Business and Management

Submitted By mabba001
Words 250
Pages 1
1. Define future and options contracts and provide an example of settling accounts of two customers that have taken opposing sides in these contracts.
2. Did Mr. Leeson fit well in the Singaporean business culture? Using his example or other examples, comment in general regarding the problems that are faced by "Ex Pat's" and their employers. (Ex Pats are workers that are sent from the home office to work in the foreign branch of a multinational).
3. Compare Mr. Leeson's frequent career moves with that of a Japanese employee with a lifetime corporate loyalty. Comment on the advantages and the shortcomings of each system.
4. What are the purposes of the following rules and how did the deviations from these rules help bring down Barings?
a) Separation of the settlement and general trading functions.
b) Margin requirements
b) Deducting errors from year-end bonuses
d) Not paying for a customer's margin call from a firm's corporate funds.
e) A bank should not put in excess of 25% of its capital in risk by purchasing derivatives.
5. Who do you blame for the collapse of the Barings bank (SIMEX, Mr. Leeson, his supervisors, the bank of England)? Why?
6. Referring to agency theory and this case, explain the risk shifting problem.
7. There are several layers of agency problems in this case. Identify at least three agency problems and discuss them. Explain the relationship, discuss which party plays the principal and agent roles and determine where the problem stems

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