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back to article Rogue trader calls for smarter regulation to avert disaster

Nick Leeson, the rogue trader who bankrupted a bank before it became fashionable, said that unless the quality of regulation improves, further financial disasters such as the Barings Bank collapse he precipitated are inevitable. Leeson, told journalists at the RSA Europe conference on Thursday that little has changed in the 14 …

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FAIL

If he didn't lose it he never had it.

So, because the humans were successfully kept out of the loop, kept in the dark, and anyway were incompetent because they didn't know what the data really meant, this brilliant light of security advocates to replace them by machines? Because machines obviously know better?

While there could very well be lots of large "cultural" problems with the people that run the banks, but I strongly disagree with his magic-bullet and blatantly ill-informed use of "the machines must save us!"

This guy had too many hats and he cleverly abused them. Is that a reason to put everyone with just one hat in a straitjacket? By using "IT"? I think I'll strongly disagree on both of those, though the UK and EU governments might all agree.

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Anonymous Coward

"disguised by pushing losses into an error account"

"Early successes were soon replaced by losses which Leeson disguised by pushing losses into an error account (called 88888...."

replace 'error account' with SPV, replace Leeson with EVERY INVESTMENT BANK IN LONDON AND NEW YORK, and you've pretty much describe the current situation.

Or try Paulson solution:

replace 'error account' with money interest free to banks, to buy government bonds,which pay interest, thus trickle funding them from the taxpayer, coupled to a stimulus package in order to require BIG borrowing. Also to every investment bank.

Or try the Geithner solution:

replace error account with companies like "Maiden Lane Commercial Mortgage Bank Securities Trust-2008" (=Fed in disguise) and do a MOCK AUCTION FRAUD and try to hide the assets in the Federal reserve and refuse congress the rights to audit them.

http://globaleconomicanalysis.blogspot.com/2009/10/fed-owns-deserted-oklahoma-city-mall.html

Good job they cleaned up their act....

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Silver badge
Grenade

"The global financial collapse last year could have been avoided."

Well yeah. If someone with more rectitude and with less bubbly love than Greenspan had been at the helm, if banks and government were not allowed to print money, if the government didn't step in to bail out banks...

I'm sorry, you were calling for better regulation?

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Anonymous Coward

Applause

"Nick Leeson, the rogue trader who bankrupted a bank before it became fashionable"

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Alert

If you think it's all over, be assured that it's only just started.

"Nick Leeson, the rogue trader who bankrupted a bank before it became fashionable, said that unless the quality of regulation improves, further financial disasters such as the Barings Bank collapse he precipitated are inevitable."

Given that all manner of regulation is being studiously avoided and actively lobbied against by those who can make money so easily by shifting figures around, further financial disasters are indeed inevitable and will arrive sooner rather than later, given the speed at which information travels nowadays. And we see a mirror of the snouts in the trough attitude of the players in the lamentable saga of the House of Commons and common Lords, where they are squirming and wriggling in all directions to try and maintain their money for nothing bonuses, which they would even suggest are their right, such is their impertinent arrogance and dumb ignorance.

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Silver badge

He is bloody right

And Osborne's appearance on BBC News today was downright embarrassing. The appeal of a populist attack on "rich men's bonuses" is understandable but I would expect a bit of self-restraint from a politician aspiring to become the next Chancellor of the Exchequer.

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Stop

@AC: If he didn't lose it he never had it. #

I seem to have read a different article.

"He told delegates that fraud management systems with appropriate knowledge-based rules are the only way to expose the cavalier risk taking he carried out during three years at Barings."

“You can't rely on the human element which is why IT systems have a vital role to play. The people who questioned me had no understanding of the market and that left them unable to put everything together.”

"IT systems still offer the best way to flag up anomalies that demanded explanation."

Nowhere does he mention replacing people with machines.

You wrote: "humans were successfully kept out of the loop, kept in the dark, and anyway were incompetent because they didn't know what the data really meant". You contradict yourself in one sentence. Good going that.

You also wrote: "I think I'll strongly disagree". You think!?

He got caught out by 'people' not by machines.

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Lesson

Nick Leeson has taught us that electronic money is secure, meaning that a bank cannot arbitrarily create it. The BCCI crash confirmed that. But you have to watch them.

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Grenade

Better regulation, better computers, or no...

...as long as the institution isn't a deposit-taking one underwritten by the UK taxpayer, then they can bankrupt each other for all I care - Mervyn King's 'separation of banking types' advocated recently would work quite well. Risk would be priced accordingly and people would put their money in safer hands - and those who gambled with the crazy investment banks would get all the crap they deserved.

As for this suggestion that these crazy casino operations would then go abroad, well, fine - let them fuck somebody else's economy up for a generation - not with UK savers' and pensioners' assets and with their stupid debts not paid for by us lot for the rest of our lives. Grr.

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Grenade

And ninethly...

If anyone is thinking that Mervyn King's plan for banks means we won't have enough silly money to spunk on overpriced piles of bricks, then, that's wrong, because if the government can finance student loans it can finance mortgages. Proper, utility-style.

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Flame

How would anyone get promoted?

Failure in politics and banking is simply rewarded by even more cushy jobs for the boys. Therefore we cannot seriously introduce a system that prevents the turds from floating to the top ... what ever would become of them??

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