Leeson warns on new op risk failures

LONDON -- Nick Leeson, the former options trader who caused the collapse of Barings Bank in 1995, believes there is a “99% correlation” between the events at Allied Irish Bank, National Australia Bank and even Shell, and those at Barings. He describes the similarities as “frightening” and says the only difference between these cases and Barings is that the institutions had sufficient capital to withstand the losses.

Leeson – who spends his time working for a cancer charity in Ireland, as well as writing for a gambling magazine, playing poker and lecturing on his experiences working for and defrauding Barings Bank – rejects the notion that such blow-ups are the result of “devious and complex frauds”.

While the derivatives being traded were complex, he says, the audit and compliance oversights were simple. And these processes should have easily prevented any large-scale losses. Leeson, who worked in