Bahrain Group Management's Negligence

When considering whether Singapore International Financial Exchange is competent, one thing must be clarified first. Singapore International Financial Exchange does not manage Singapore Bahrain Futures Company or Singapore International Financial Exchange. Liability for the affairs of any clearing member. The Singapore International Financial Exchange is only a trading venue for clearing members to conduct transactions. However, even so, SGX still has the opportunity to identify and report signs of improper behavior by its members.

This opportunity appeared in late 1994 and early 1995. At that time, the Singapore International Financial Exchange discovered several anomalies in the trading of Singapore Bahrain Futures Company and made some inquiries to the Bahrain Group about Singapore Bahrain Futures Company. These might have contributed to the earlier discovery of Lisson's activities. According to the official liquidator, the collapse was possible if Bahrain Group's management properly reviewed and understood the concerns expressed by SGX in its letter to the group. The official liquidator considered the Bahrain Asset and Liability Management Committee's response to the second letter from SGX to be particularly scathing, as the letter gave many false assurances to SGX that were baseless. Likewise, Jones's attitude towards the two letters to SGX reflects an unacceptable level of complacency on his part. We cannot understand why Qiongqi, as the financial director of Singapore Bahrain Futures Company, signed the reply letter drafted by Leeson in response to Singapore International Financial Exchange's inquiry into Leeson's trading activities without having an independent and detailed understanding of the entire incident.

(2) Loose internal controls

From the perspective of the entire process of Bahrain’s bankruptcy, both financial regulatory agencies in various countries and international financial markets generally believe that the internal management of financial institutions is risk control. core issues, but Bahrain’s internal controls are very loose. According to reports, before the tragedy on February 26, Barings Bank's securities investments had been exposed to great risks, but this did not arouse the vigilance of the bank's senior managers. In the first week of January, Leeson held 3,024 contracts. 20 days later, he held 16,852 contracts. In just 20 days, the number of contract holdings increased fourfold. By mid-February, Leeson’s holdings exceeded 20,000 contracts, eight times more than the position held by the second largest trader operating in the same market. This signal, for reasons unknown to us, was not noticed by Barings' top management to respond appropriately.

In short, Bahrain’s internal control system failed and the early warning system failed, which ultimately led to the tragedy. Shortly after the Bahrain collapse, senior executives at the bank said they knew nothing about what Leeson was doing in Singapore, and as of February 23, the day Leeson resigned, the company's risk report still showed a trading balance.

However, according to relevant authorities in Singapore, Bahrain remitted US$128 million to the International Monetary Exchange of Singapore in the first 18 days of February 1995 to advance maintenance payments; according to the Financial Times, Bank of England Governor Eddie George spoke to the British public on April 5 about the Treasury and the House Committee