When one of Britain’s oldest banks went bust 10 years ago, on 23 February 1995, with debts in excess of £1.3 billion it came as a nasty surprise not only to the markets and the regulators, but also the management of Barings itself. Permitting an environment of weak controls through ignorance and poor management are cardinal sins for company executives who are tasked with ensuring good control and creating profits for their investors.

Although the loss that resulted in the Barings collapse was not the biggest loss ever incurred by a financial organisation, it was catastrophic for the bank. In the post mortem that followed the collapse it was discovered that the underlying causes were down to poor segregation of duties, lack of management understanding of the business and supervision, poor control design and performance, as well as a lack of capital. This was not a momentary lapse in controls; this was the state of the daily operations.

10 years on, the Barings collapse is still thought of with a high degree of incredulity, yet could the same thing happen again today? With subsequent improvements in compliance and risk control operations as well as regulatory changes, many would say it couldn’t. But are these steps enough?