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The Risk of Rogues by ProQuest


In 1995, rogue trader Nick Leeson racked up $1.4 billion in losses on unauthorized futures trades for the British bank Barings, resulting in one of the most dramatic bank failures in history. Determined to prevent this from recurring, banks adopted new risk management systems to make it impossible for another Barings-style fiasco to occur. And for more than a decade it worked. That is, until Jerome Kerviel entered the picture. Kerviel started at Societe Generale in 2000. Kerviel began making bets on the futures market that well exceeded Societe Generale's risk appetite. Societe Generale's safeguards failed spectacularly, most likely because bank officials grew complacent and failed to properly enforce their own rules.

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