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(d) Poor control procedures
(iii) Market risk
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Because Leeson controlled the back office and because Barings had no independent unit checking the accuracy of his reports, the market risk reports generated by Barings' risk management unit and passed on to ALCO were inaccurate. Leeson's futures positions showed no market risk because trades were supposedly offset by opposite transactions on another exchange. Peter Baring and Baring shareholders have learnt too painfully the meaning of 'garbage-in, garbage-out' because a system is only as good as the data it receives
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Case Studies *
Not Just One Man - Barings *
II. Lessons from Leeson *
(d) Poor control procedures
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