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Chapter 4. Big Events in Trend Following > Event #4: Barings Bank Meltdown

Event #4: Barings Bank Meltdown

The first few months of 1995 must go down as one of the most eventful periods in the history of speculative trading. The market events of that time period, by themselves, could be the subject of a graduate course in finance at Harvard Business School. Only a few years later, despite the significance of what happened, the events have been forgotten.

A rogue trader, Nick Leeson, overextended Barings Bank in the Nikkei 225, the Japanese equivalent to the American Dow, by speculating that the Nikkei 225 would move higher. It tanked, and Barings, the Queen’s bank, one of the oldest, most well-established banks in England, collapsed, losing $2.2 billion.


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