CITY AND SUBURBAN
Not very bright, out of his depth, and bent Leeson books his one-way ticket
CHRISTOPHER FILDES
We are taught to show pity for all prisoners and captives, and I am sorry for anyone who has been dealt a one-way tick- et to Singapore and an indefinite reserva- tion once he gets there. So I am sorry for Nicholas Leeson. Talking to David Frost will be the least of his punishments. Even so, everything he told his inquisitor backed him further into his cell and gave the key another turn. The official version turns out to be right. He was supposed to be running an arbitrage business, offsetting two risks against each other — virtually risk-free and very profitable, so Barings foolishly imag- ined. He was in fact backing fifty-fifty chances, and picking losers. He set up the notorious 88888 account (all the eights, or the best of Chinese luck) as a parking-lot for mistakes. He had the software altered so as to cut the link between 88888 and London. His well-paid seniors were casual to a degree, but criminal conspirators? He did not suggest it. I felt sure that he would try to plant the blame on one of them, but instead he tried to blame the Bank of Eng- land for not covering up after him. Once the truth came out, he claimed, the losses multiplied. By that time he was in hiding and his colleagues had found the scissors- and-paste kit he used for his forgeries, so it would have been hard to keep his secret not to say dishonest. I watched his perfor- mance with two experts from the City's dealing-rooms. 'Not very bright,' said one. `And out of his depth,' said the other. Now he must be on his way. Singapore is an unforgiving place for visitors who break its laws, as Michael Fay from Ohio discovered, but at least he was allowed to take his injured bottom home.
A nasty case of TIDS
TIDS — Tickets In Drawer Syndrome .— is a recurrent complaint in dealing rooms. Dealers park the evidence of their mistakes and go for double or quits. They do not usually bring their banks down. Well-man- aged banks know the symptoms and watch for them. Barings was a badly managed bank and omitted the most elementary pre- cautions. Mr Leeson says that, his seniors wanted to believe his figures, and therefore asked no questions. Certainly they had, in Barings' bonuses, the strongest personal incentives to believe. The last line of defence should have been the Bank of Eng- land, but the state of Barings' affairs, though potentially and actually disastrous, went unnoticed. Peter Baring blamed a global conspiracy, and Eddie George com- plains of a witch-hunt. I hope they will be asked to give further and better particulars to David Frost.
Water splashes out
WAIT FOR IT, wait for it. Any moment now I expect to see Yorkshire Water make a bid for Yorkshire Bank. It will come with the usual flimflam about syner- gy — fluid use of liquid assets — and with claims that customers will benefit, though not in this millennium. Dafter ideas are already circulating. North West Water has bid £1112 billion for its electric neighbour, Norweb. What makes its board think it can manage its own business, let alone Norweb's, I cannot imagine. This year the water companies have contrived to alien- ate the public, to embarrass the Govern- ment, and, as their regulator says, to give poor service to their customers. You might have thought that a period of peni- tence and self-examination would now fol- low. Wrong. When the sun was shining, Yorkshire advised its customers to go away. Now that it is raining, Yorkshire is cross with them for coming back and using water. The situation is critical, says Yorkshire's spokesman, who goes by the fine old West Riding name of Gerry mac Griogair, no doubt for self-protec- tion. What Yorkshire Water could see in Yorkshire Bank is what North West Water can see in Norweb: money. 'The only synergy between the two industries,' says John Devaney of Eastern Electricity, 'is that one needs cash and the other has it.' Water companies planning to take other companies over should be subjected to my simple test. Before they are allowed to go ahead, they must demonstrate that they can organise a wash-up in a brewery.
Swiss Bankside
THE GLOBE Theatre, resurrected on Bankside, stands next to Sir Christopher Wren's site office. Here he could look across the Thames to see St Paul's cathedral rising on its hill, or not rising, if the builders had skived off. The site office, a converted Eliza- bethan bawdy-house which used to trade as The Cardinal's Hat, now looks across to a charmless rectangular building which accom- modates the Swiss Bank Corporation. A dome and some pinnacles peep over the top of it. Here is a project worthy of the Millen- nium Fund, which (I see) has just shelled out £8 million to tidy up old collieries. What would it pay to restore the view that Wren saw? I dare say that the Swiss Bank has more money than the fund and could be induced to pull its building down. It would cost no more than the spare change from buying S.G.Warburg. The Swiss would have the option to re-house their purchase in the building and then blow it up.
A bas le franc
FRENCH resignations are coming in like junk-mail. A new chairman of Telecom lasted ten days, a shiny new finance minister stayed for eleven weeks before falling out with Alain Juppe, the Prime Minister, and this week the franc fort showed welcome signs of faiblesse on rumours that M. Juppe was resigning. He is committed to privatising state industries like Telecom, but no one cares to contem- plate the shake-out that would follow. Hence the rows and resignations and anxious attempts to paper over the cracks. Unemploy- ment is, of course, a price paid for the franc fort. I should be sorry to think that boycotts of French wines are now making matters worse, but I expect to be offered a loyalty bonus. A weaker franc would do.
Beyond our Ken
THE TREASURY lives in a labyrinth, and a friend of mine, lost in its circular corridors, was turned back when about to blunder into the Chancellor's den. He was diverted into the next room, which (he says) housed two advisers in amazingly broad braces. One was fast asleep and the other was reading the Sun. Expect Kenneth Clarke's policy to be populist and soporific.
Previous page
