Barings history recalled in Buenos Aires sewer deal
HISTORY, it is said, has a habit of repeating itself. The directors of the ill fated Barings Bank would, with hindsight, agree and, if legally possible, would never again employ anyone named Nicholas. Their nemesis, Nick Leeson, who broke the bank with losses of £830 million from fraudulent futures trading in the Far East, was not the first Nick to push Barings to the brink of ruin.
A television documentary this week cited an incident in the 1890s when a young bank clerk was dispatched to Argentina to evaluate investment opportunities in the developing economies of South America. He sang the praises of a company installing a sewer system in Buenos Aires. Barings bought all the shares, only to discover that no market existed for the stock.
The bank, effectively bankrupt, had to be rescued by the Bank of England. The B of E, possibly with a longer memory than Barings, learned the lessons of history and the next time let Barings go down the tubes. The name of that young Victorian clerk?. Nicholas Bower.