Ward's Book of Days.
Pages of interesting anniversaries.
What happened on this day in history.
On this day in history in 1995, Barings Bank collapsed.
Barings was a long established bank which became insolvent when an employee lost 1.4 billion dollars in monetary speculation.
In 1763, Francis Baring founded a banking company in London, primarily to assist in the dealings of the family wool business. By 1792, the bank was a large and successful business, and helped the government to raise funds for the war against France. The Prime Minister, Pitt the Younger, made Francis Baring a baronet. In 1802, the bank assisted the United States in the Louisiana Purchase, a transaction by which America bought vast tracts of territory from France, doubling its size. In the Nineteenth Century, Barings, acted for the United States, selling bonds and financing trade.
In the Twentieth Century, the bank became chief advisor to the Royal Family, and managed its investments. During the Second World War, Barings was entrusted by the government to liquidate assets in the United States to finance the war effort.
After the Second World War, Barings was overtaken in size and influence by other banking houses, but remained a substantial player in the market, until in 1995, it was announced that an employee had lost 1.4 billion dollars in unauthorised transactions on the futures market. On 26th February, Barings declared insolvency and closed its doors permanently.
For another spectacular business collapse see The South Sea Bubble.
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