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What are the key factors that affected the financial crisis involving the case

There are few key factors that affected the financial crisis which involving the case.
The financial crisis was affected by poor management oversight which were cause by the
Barings brothers. The poor management are lack of managerial oversight and poorly managed
internal controls. This led to hiring Nick Leeson who has no experience in managing a team,
or in trading. He also are not qualified for the position.
In 1992, Leeson began the hiring of a local staff. Leesons trading activities started soon
thereafter, and he proceeded to lose in excess of 2 million pounds. To hide the losses Leeson
claimed to have been made by his traders, he opened and used a replica of the internally bank
established error account 88888 which was used while in Indonesia, to which he had noted
that, nobody in London took notice. His staff is lack of accountability. However, lesson began
to trade in a maniacal and unauthorized way which leads to failure.
Another key factors are situational pressure, availability of opportunity and also personal
characteristics present because the perceived profits were so large that his reputation as a star
performer gave him unlimited access to the Baring capital. The risks that were exposed show
a lack of managerial control. When Leeson was promoted to General Manager, and given the
position to head the derivatives he was also given the authority to manage both the front and
back office of the Singapore operation. The lack of segregation enabled Leeson to manipulate
the staff and the organizational operations he sought funds from. The operational risk and the
implied lack of understanding of the activities on the trading floor, the lack of oversight and
reconciliation of the 88888 accounts, the failure to verify the information being provided to
obtain funds, and the blind eye from the Bank of England led to the complete failure of the
check and balance system and enabled fraud to occur.

The failures were observed at

numerous levels of the organization, and in numerous locations, and the ultimate cost due to
the lack of managerial controls to the organization were its own demise.

The fall of Baring Futures Singapore was caused by institutional incompetence, lack of
understanding of futures business among senior executives, and a total failure of internal
controls. There are two types of fraud that have occurred. The first being management fraud,
and the second employee fraud. For employee fraud to be present it involves the theft of
assets and involves three steps. The steps include take, sell, and hide". For management
fraud to occur there are several factors. It happens at levels that are above the internal control
systems.
In conclusion, it was the flaws of the organizational structure itself and the lack of
adherence to an otherwise generally acceptable practice of internal controls as specified by the
Foreign Corrupt Practices act of 1977 that were the primary reasons for the banks' failure.
Had the management teams fully understood the businesses they managed, and had they taken
full responsibility for each business activity with a clear segregation of duties, relevant
internal controls, including appropriate independent risk management for all business
activities, there would not have been the possibility to commit such egregious fraud.
Singapore Minister of Finance said lack of oversight, and internal controls as being the
failures of particular individuals who did not perform their duties with efficiency. "key
individuals of the Baring Groups management were wilfully blind and reckless to the truth

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