‘Internal woes ruined Barings’

BROUGHT DOWN BY A LACK OF CONTROL

PRIME Minister Goh Chok Tong said yesterday that the Barings debacle was the result of internal problems in the British investment bank.

It was essentially “an internal problem in the Barings Group, a lack of control”, he said in reply to questions from reporters after a meeting with Australian Prime Minister Paul Keating.

Barings, Britain’s oldest merchant bank, collapsed last weekend under the weight of losses of some $1.5 billion chalked up by futures trader Nick Leeson here.

Mr Goh said that Singapore authorities did well in anticipating the problems of Barings’ local futures trading arm. “Looking at the reports from the investigation, we felt that we have done very well,” he said, referring to the probe by Singapore regulators into Barings’ collapse. “The authorities knew what was coming … they forewarned people involved.”

The Singapore International Monetary Exchange (Simex) said on Saturday that warning signals to the bank’s management came as early as 1992 and again seven months ago, when it was advised that Mr Leeson wielded too much power and was inadequately supervised.

Mr Goh said that the Barings crash had no impact on Singapore markets. “The stock market is up, Simex is trading and there are no losses for Singapore.”