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Barings Bank was a British merchant bank based in London, and one of England's oldest merchant banks after Berenberg Bank, Barings' close collaborator and German representative. It was founded in 1762 by Francis Baring, a British-born member of the German–British Baring family of merchants and bankers. The bank collapsed in 1995 after suffering losses of £827 million (£1.7 billion in 2021) resulting from fraudulent investments, primarily in futures contracts, conducted by its employee Nick Leeson, working at its office in Singapore. History 1762–1889 Barings Bank was founded in 1762 as the John and Francis Baring Company by Sir Francis Baring, 1st Baronet, with his older brother John Baring as a mostly silent partner. They were sons of John (né Johann) Baring, wool trader of Exeter, born in Bremen, Germany. The company started business in offices off Cheapside in London, and within a few years moved to larger quarters in Mincing Lane. Barings gradually diversified from wool into many other commodities, providing financial services for the rapid growth of international trade, including the lucrative slave trade which enriched the family and the business considerably and allowed significant expansion of the bank's activities and prestige. The success of Baring's was greatly influenced by establishment of a network of corresponding houses. One of the most valuable connections was Hope & Co., the most powerful merchant bank of Amsterdam, at that time Europe's leading financial centre. Hope & Co played a major part in the finances of the Dutch East India Company (VOC) and during the Seven Years' War (1756–1763) Thomas Hope and his brother Adria profited from the Netherlands' neutral position. In 1774, Barings started business in North America. By 1790, Barings had greatly expanded its resources, both through Francis's efforts in London and by association with Hope & Co. In 1793, the increased business necessitated a move to larger quarters in Devonshire Square. In 1796, the bank helped to finance the purchase of about 1 million acres (4000 km2) of remote land that became part of the US state of Maine. In 1800, John retired and the company was reorganized as Francis Baring and Co.. Francis's new partners were his eldest son Thomas (later to be Sir Thomas Baring, 2nd Baronet) and son-in-law, Charles Wall. Then, in 1802, Barings and Hope & Co. were called on to facilitate the largest land purchase in history: the Louisiana Purchase, which doubled the size of the United States. It is regarded as "one of the most historically significant trades of all time". This was accomplished even though Britain was at war with France and the sale helped to finance Napoleon's war effort. Technically, the United States purchased Louisiana from Barings and Hope, not from Napoleon. Baring was willing to help Napoleon in the short term because he, and British politicians who backed him, predicted that American expansion into Louisiana would ensure Barings' profits in Britain. After a $3 million down payment in gold, the remainder of the purchase was made in United States bonds, which Napoleon sold to Barings through Hope & Co. of Amsterdam at a price of $87.50 per $100 face value (a discount of one-eighth). Francis's second son Alexander Baring, 1st Baron Ashburton, working for Hope & Co., made the arrangements in Paris with François Barbé-Marbois, director of the Public Treasury. Alexander then sailed to the United States and back to pick up the bonds and deliver them to France. In 1803, Francis began to withdraw from active management, bringing in Thomas's younger brothers Alexander and Henry to become partners in 1804. The new partnership was called Baring Brothers & Co., which it remained until 1890. The offspring of these three brothers became the future generations of Barings leadership. In 1806, the company relocated to 8 Bishopsgate, where it stayed for the remaining life of the company. The building underwent several expansions and refurbishments, and was ultimately replaced with a new high-rise building in 1981. Barings helped to finance the United States government during the War of 1812. By 1818, Barings was called "the sixth great European power", after England, France, Prussia, Austria and Russia. A fall-off in business and some poor leadership in 1820s caused Barings to cede its dominance in the City of London to the rival firm of N M Rothschild & Sons. Barings remained a powerful firm, however, and in the 1830s the leadership of new American partner Joshua Bates, together with Thomas Baring (1799–1873), son of Sir Thomas Baring, 2nd Baronet, began a turnaround. Bates advocated a shift in Barings' efforts from Europe to the Americas, believing that greater opportunity lay in the West. In 1832, a Barings office was established in Liverpool specifically to capitalise on new North American opportunities. In 1843, Barings became an exclusive agent to the US government. Barings was appointed by Sir Robert Peel to supply "Indian corn" (maize) to Ireland for famine relief between November 1845 and July 1846, after the staple potato crop failed. The company declined to act beyond 1846, when the government instructed it to restrict its purchases to within Britain. Baring Brothers stated it would refuse future commissions in famine relief, with the blame this could so easily entail. Its position as the prime purchaser of Indian corn was assumed by Erichson, a corn factor of Fenchurch St, London. In 1851, Baring and Bates brought in another American, Russell Sturgis (1805-1887), as a partner. Despite the embarrassment to his partners caused by his sympathies for the South in the American Civil War, Sturgis proved a capable banker. Baring did not deal in U.S. bonds, but it did help fund the American purchases of armaments. After the death of Bates in 1864, Sturgis gradually assumed a leadership role. In the 1850s and 1860s, the commercial credit business provided the firm with its basic income. Thomas Baring's nephew Edward, son of Henry Baring, became a partner in 1856. By the 1870s, under the emerging leadership of "Ned" Baring, later Edward Baring, 1st Baron Revelstoke, Barings were increasingly involved in international securities, especially from the United States, Canada, and Argentina. Barings cautiously and successfully ventured into the North American railroad boom following the Civil War. A new railroad town was renamed Revelstoke, British Columbia, in honour of the leading partner of the bank that enabled the completion of the Canadian-Pacific Railway. Barings also helped to finance major railways including the Atchison, Topeka and Santa Fe Railway. "Ned Baring" had a daughter, Margaret Baring, who was a great-grandmother of Diana, Princess of Wales. In 1886, the bank helped broker the listing of the Guinness brewery. Panic of 1890 In the late 1880s, daring efforts in underwriting got the firm into serious trouble through overexposure to Arge.... Discover the Joshua D Mezrich popular books. Find the top 100 most popular Joshua D Mezrich books.