Nick Leeson and the Collapse of Barings Bank: Socio-Technical Networks and the ‘Rogue Trader’

Abstract. This paper examines the collapse of Barings Bank, utilizing an extended analytical framework based on Callon’s sociology of translation. It shows how Leeson linked himself inextricably with Barings ’ executives need for profit, mobilizing them (and others) into defending him when his activities were subject to scrutiny. It goes on to explain the process through which Leeson effectively lost control of his socio-technical network, and concludes by examining the difficulty of Leeson’s presentation of himself to the world as a ‘rogue trader’. Key words. actor-network; Barings; Leeson; rogue trader The story of the collapse of Barings Bank has become a case-study in the risk financial institutions face from fraud (see, for example, Howells and Bain, 1998: 292–93). It has also become a reference point against which new cases of financial malfeasance are judged—asset traders who lose large sums of money are described as the ‘new Nick Leeson’. Leeson himself remains a popular media figure, appearing on quiz shows a decade after the events from which he derives his fame. This paper utilizes Callon’s ‘sociology of translation ’ (see especially Callon, 1986) to analyse the case of the collapse of Barings and Leeson’s role within it. It does this in order to present a systematic analysis of the case that develops Callon’s framework further by incorporating insights from the work of Munro (1999) to extend the vocabulary of actor-network terms to include two more concepts necessary to account for the disin-tegration of a socio-technical network. The paper demonstrates how existing accounts of the collapse of Barings are in themselves incomplet