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KRIs ‘would not have saved Barings’

Nice -- Key risk indicators (KRIs) would not have smoked out the trading abuses committed by Nick Leeson and prevented the downfall of Barings Bank, says an operational risk manager at ING Bank, which took over the failed institution in 1995.

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Huib ter Harr, managing director and head of op risk at ING Bank in the Netherlands, says KRIs “would not have made a difference in the second half of 1994 or in 1995, because [the situation] was totally out of hand”.

Leeson was taking speculative positions in Japanese futures contracts listed on Asian exchanges, and hid the trades in a trading error account. He was able to accomplish this because not only was he a trader, but he also recorded the trades and performed certain back-office

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