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All That Glitters: The Fall of Barings
The definitive, classic account of the fall of the House of Baring and the ultimate rogue trader Nick Leeson. John Gapper, associate editor of the Financial Times, and his co-author Nick Denton, now founder of Gawker Media, interviewed the major players involved in the collapse of one of England's oldest banks. All That Glitters reveals the Faustian deal struck between the whizz-kid traders who seemed to be bringing in huge profits and the grandees who were happy to pocket them without asking too many questions. For the first time, the actions and motives of Nick Leeson and all the participants are explained, including the final days when politicians and bankers made a last-ditch attempt to save the bank.
- GenresNonfictionHistory
364 pages, Paperback
First published January 1, 1996
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102 people want to read
About the author
John Gapper
6 books3 followersChief business commentator and an associate editor of the Financial Times. He was named one of the 100 most influential men in Britain by GQ magazine in 2009. He lives in Brooklyn, New York.
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Displaying 1 - 6 of 6 reviews
September 5, 2015
Very well paced and well written. These two journalists have done a good job.
Reading this book again, post September 2008, I paused, with mild depression, at the thought that simple selfish naked human greed continues to overrule any honest desire to wholly and accurately learn and successfully implement lessons from inadequate financial systems (or indeed the blind lack of any system whatsoever). Money should facilitate the trading of physical commodities. It should never have become a commodity in its own right.
Reading this book again, post September 2008, I paused, with mild depression, at the thought that simple selfish naked human greed continues to overrule any honest desire to wholly and accurately learn and successfully implement lessons from inadequate financial systems (or indeed the blind lack of any system whatsoever). Money should facilitate the trading of physical commodities. It should never have become a commodity in its own right.
September 17, 2021
This is an account of the collapse of Barings Bank in the 1990s due to rogue trader Nick Leeson. I've read Leeson's own book a few times but this is a 3rd party account written shortly after the events by a couple of Financial Times journalists named Gapper and Denton. Leeson's book is a great read, though it's debatable to what degree it may be self-serving and accurate. But in any case Leeson was limited to his own point of view. This book contains a great deal of detail involving the other people and history of the bank.
The opening section begins at the end, recounting how bank officials, chasing down discrepancies and cash flow issues, finally unravel the catastrophic truth of what Leeson had been up to.
Then, cut to backstory. There's really more detailed Barings history here than is maybe necessary. This is as much a history of Barings Bank as the story of its demise. After the opening section, Leeson isn't brought back into the narrative until well past the halfway point of the text. But you can't fault the writers for not doing their homework and thoroughly laying out the context of the story and the cast of characters at Barings.
There are interesting details not in Leeson's narrative. Before going to Singapore, Leeson spent some time as a troubleshooter ferreting out problems Barings had with complex settlements, keeping up with paperwork and collateral-management required by various countries' exchanges etc. In that capacity he got multiple people fired for sloppiness or intentional wrongdoing (not clear which). He comes across as a two-face, befriending people to get info, then throwing them under the bus and getting them fired.
Finally his 2 1/2 year period of fraud is described. Gapper and Denton go into a lot of detail, but in short Leeson -- having achieved his dream of becoming a trader -- quickly began losing money, but found he could create an account to catch losses and errors. And since there were inadequate checks and balances on Leeson, he could hide what he was really doing. Any trader wins some and loses some, but Leeson managed to hide most of his losses into the error account, making it seem he was usually winning, and so uncommonly skilled at trading. The amount of losses grew wildly over time, even as Leeson faked being hugely profitable in trading. Barings appeared to be making nice profits nominally thanks to Leeson, despite the nagging fact that it was having to fork over huge and increasing amounts of cash on a regular basis to the Singapore SIMEX exchange for margin calls that no one except Leeson could quite understand.
Leeson also raised cash (not profits) with his trading activities, primarily selling option straddles, collecting a premium for writing them, whenever he desperately needed cash to cover realized losses. This meant he was "selling" volatility, and would have profited if the Japanese stock market remained stable, while taking on the risk of losing money if the market moved up or down much. He was taking in cash TODAY at the risk of having to pay out huge amounts of cash months later to close out options contracts if the market went against him. That of course is what it did, and when the bill came due, he just repeated the process on an ever-grander scale. Because Leeson had done this in a big way, his hidden losses began to mushroom. Although Leeson supposedly was making tons of accounting profits, the net result of his trading was not to bring cash INTO Barings, it was relentlessly to take huge amounts of cash OUT of Barings.
Leeson benefitted greatly from the management dysfunction at Barings, where compartmentalization, restructurings, and political infighting and rivalries among senior managers prevented any one executive from putting together the full picture of what Leeson was up to. Meanwhile to an amazing degree all the managers and executives looking into the situation allowed Leeson to be evasive, delay answers, ignore questions, and offer ambiguous doubletalk time and again.
Meanwhile when his large volume of trading needed to be explained both internally and among the wider trading world, Leeson spun the lie that he was trading on behalf of a hedge fund client, giving rise to the specter of a mysterious Customer X recklessly throwing money around. The fact that Leeson never had to prove even to Barings that Customer X actually existed shows the failure of oversight.
In Leeson's own book he portrays himself as a fundamentally honest, well-intentioned guy who started by covering up someone else's mistake and then didn't have the moral courage to own up to it, while deluding himself with overconfidence that he could make things right. But THIS book paints a darker picture of Leeson: untrustworthy, two-faced, and to some degree lacking empathy. His initial fraud was based on covering up his own losses, not others' mistakes -- in the end he kept lying about that. He was a serial liar and a forger, and did what he did because he got caught up in the glamor of being a star trader, the "Michael Jordan of Barings" -- even though in reality he wasn't very good at trading, and didn't even have the math skills to properly price options he traded. He kept up a fraud because he didn't want to lose that glory.
In the end, Leeson had built up such huge bets in the wrong direction that his situation was no longer tenable. In February of 1995, with lots of people trying to get hold of him, he fled on an unannounced vacation. The book ends with the aftermath: the failure of Barings, it's sale to ING, Leeson's imprisonment, a review of the fates of the cast of characters. I find this an endlessly fascinating story. No doubt this book is more honest and accurate than Leeson's, though I still like Leeson's book for its first-person portrayal of a relentless sense of impending doom.
The opening section begins at the end, recounting how bank officials, chasing down discrepancies and cash flow issues, finally unravel the catastrophic truth of what Leeson had been up to.
Then, cut to backstory. There's really more detailed Barings history here than is maybe necessary. This is as much a history of Barings Bank as the story of its demise. After the opening section, Leeson isn't brought back into the narrative until well past the halfway point of the text. But you can't fault the writers for not doing their homework and thoroughly laying out the context of the story and the cast of characters at Barings.
There are interesting details not in Leeson's narrative. Before going to Singapore, Leeson spent some time as a troubleshooter ferreting out problems Barings had with complex settlements, keeping up with paperwork and collateral-management required by various countries' exchanges etc. In that capacity he got multiple people fired for sloppiness or intentional wrongdoing (not clear which). He comes across as a two-face, befriending people to get info, then throwing them under the bus and getting them fired.
Finally his 2 1/2 year period of fraud is described. Gapper and Denton go into a lot of detail, but in short Leeson -- having achieved his dream of becoming a trader -- quickly began losing money, but found he could create an account to catch losses and errors. And since there were inadequate checks and balances on Leeson, he could hide what he was really doing. Any trader wins some and loses some, but Leeson managed to hide most of his losses into the error account, making it seem he was usually winning, and so uncommonly skilled at trading. The amount of losses grew wildly over time, even as Leeson faked being hugely profitable in trading. Barings appeared to be making nice profits nominally thanks to Leeson, despite the nagging fact that it was having to fork over huge and increasing amounts of cash on a regular basis to the Singapore SIMEX exchange for margin calls that no one except Leeson could quite understand.
Leeson also raised cash (not profits) with his trading activities, primarily selling option straddles, collecting a premium for writing them, whenever he desperately needed cash to cover realized losses. This meant he was "selling" volatility, and would have profited if the Japanese stock market remained stable, while taking on the risk of losing money if the market moved up or down much. He was taking in cash TODAY at the risk of having to pay out huge amounts of cash months later to close out options contracts if the market went against him. That of course is what it did, and when the bill came due, he just repeated the process on an ever-grander scale. Because Leeson had done this in a big way, his hidden losses began to mushroom. Although Leeson supposedly was making tons of accounting profits, the net result of his trading was not to bring cash INTO Barings, it was relentlessly to take huge amounts of cash OUT of Barings.
Leeson benefitted greatly from the management dysfunction at Barings, where compartmentalization, restructurings, and political infighting and rivalries among senior managers prevented any one executive from putting together the full picture of what Leeson was up to. Meanwhile to an amazing degree all the managers and executives looking into the situation allowed Leeson to be evasive, delay answers, ignore questions, and offer ambiguous doubletalk time and again.
Meanwhile when his large volume of trading needed to be explained both internally and among the wider trading world, Leeson spun the lie that he was trading on behalf of a hedge fund client, giving rise to the specter of a mysterious Customer X recklessly throwing money around. The fact that Leeson never had to prove even to Barings that Customer X actually existed shows the failure of oversight.
In Leeson's own book he portrays himself as a fundamentally honest, well-intentioned guy who started by covering up someone else's mistake and then didn't have the moral courage to own up to it, while deluding himself with overconfidence that he could make things right. But THIS book paints a darker picture of Leeson: untrustworthy, two-faced, and to some degree lacking empathy. His initial fraud was based on covering up his own losses, not others' mistakes -- in the end he kept lying about that. He was a serial liar and a forger, and did what he did because he got caught up in the glamor of being a star trader, the "Michael Jordan of Barings" -- even though in reality he wasn't very good at trading, and didn't even have the math skills to properly price options he traded. He kept up a fraud because he didn't want to lose that glory.
In the end, Leeson had built up such huge bets in the wrong direction that his situation was no longer tenable. In February of 1995, with lots of people trying to get hold of him, he fled on an unannounced vacation. The book ends with the aftermath: the failure of Barings, it's sale to ING, Leeson's imprisonment, a review of the fates of the cast of characters. I find this an endlessly fascinating story. No doubt this book is more honest and accurate than Leeson's, though I still like Leeson's book for its first-person portrayal of a relentless sense of impending doom.
November 9, 2015
I just about gave up on this book because of the arcane terminology but as the whole sordid story unfolded I couldn't get it out of my mind. When a white collar yob like Nick Leeson can bring down a venerable investment bank like Barings things are seriously out of whack. This is a tale of stunning incompetence coupled with all consuming greed that seems to characterize modern capitalism. All That Glitters made me angry because not much seems to have changed in the ensuing 20 years since it was published.
February 14, 2025
Thorough account of the fall of Barings and the poor leadership that allowed it to happen. The epilogue reminds of of who are the real losers from all this.
April 15, 2025
A detailed and well-researched book on the creation, rise, and eventual fall of Barings. I found the origin stories of and around the firm extremely interesting. The coverage of the Leeson affair was excellent, and exposes the lie that Leeson was just an "ordinary guy in an extraordinary situation", and "if only I hadn't booked that first loss to the five 8s account". The reality is that Leeson was trying to create an image for himself, and he defrauded Barings in order to do it, by offering futures rolls that were below the market price. The error trading and attempts to double-down were just the icing on the cake for a man who was fundamentally a fraudster.
December 12, 2014
Very compelling story. I read this shortly after the 2008 crash, and it was awful to see the retelling of the same tale. Nick's trading was an absolute mess, and the consequences were devastating.
A very good read.
A very good read.
Displaying 1 - 6 of 6 reviews