Tuesday, June 22, 1999 Published at 11:58 GMT 12:58 UK
Business: The Economy
Leeson scandal 'could happen again'
Ewan McGregor as Leeson in Rogue Trader (courtesy of Pathe)
When trader Nick Leeson shook the financial world by singlehandedly bringing down an established bank, City chiefs were so shocked that they pledged to make changes to ensure it could never happen again.
The film of his story, Rogue Trader, which has had its UK debut, exposes just how vulnerable the world's financial markets were.
But today, many in the City are not convinced anything has changed since the Barings affair.
He was able to get away with his disastrous dealings by keeping his huge losses concealed in two accounts, which were reported to different managers. A lack of checks in the system meant that he was the only person who knew the full picture.
After the scandal was uncovered, banks reviewed their internal procedures, activities in dealing rooms around the world were tightened up and governments worked to clarify regulations of financial institutions with branches overseas.
Nonetheless, a stream of financial scandals has continued to appear, in the US, UK and Asia.
James Archer, son of millionaire author Lord Archer, was sacked from his high-flying City job after an investigation into suspicious share trading. He was one of an infamous gang of dealers known as the 'Flaming Ferraris' who took huge bets on the money markets.
And in the 1980s, rogue trader Yasuo Hamanaka ran up losses of £1.56bn for the Japanese Sumitomo Corporation in futures trading - similar to Leeson.
The fact that rewards for traders are still linked to performance fuels fears of a repeat of the Barings disaster.
The film's executive producer, Sir David Frost, said: "I think it shows the financial markets world is a good deal less efficient than we believe. If we look at our bank statements, we can see computer errors, for example. And at the same time, there's negligence. A lot of people turned a Nelsonic blind eye to what he was doing because he seemed to be bringing in the profits."
Officials in Singapore say Leeson has sold the story of his life in prison to a British tabloid newspaper, a month before he is due to be released from prison there.
Leeson, 32, who is suffering from cancer, has been held in custody since 1995.
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