Leeson's unauthorized trades were highly exposed to the Nikkei 225 index, and the earthquake triggeredheavy losses.
The eventaccelerated the exposure of Leeson’s fraudulent activities, leading toBarings' collapse.
Why Answer D is Correct
TheKobe earthquake created market turmoil, forcing Barings toconfront its financial position, ultimately revealing the hidden losses.
Why Other Answers Are Incorrect
Option
Explanation
A. The collapse of Lehman Brothers into bankruptcy in 2002.
Incorrect–Lehman Brothers collapsed in 2008, not 2002.
B. The Singapore earthquake of January 17th, 1995.
Incorrect– No significant earthquake occurred in Singapore on that date.
C. The collapse of Lehman Brothers into bankruptcy in 2008.
Incorrect–Barings collapsed in 1995, not related to Lehman Brothers' 2008 failure.
PRMIA Case Study on Barings Bank Collapse
Basel Committee Principles on Risk Oversight and Fraud Prevention
PRMIA References for Verification
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