Explanation:
The correct answer is D because one of the key factors in the Barings Bank collapse was the lack of clear oversight and control mechanisms. Nick Leeson was able to hide his massive losses due to:
Regarding the other options:
The Barings case is a classic example of operational risk failure where inadequate internal controls and oversight allowed a single trader to cause the collapse of a 233-year-old bank.
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In the case of Barings Bank (Barings), Nick Leeson incurred huge trading losses. Which of the following statements correctly describes one of the factors that led to the bankruptcy of Barings?
A
Barings had insufficient liquidity to cover marked to market losses.
B
Leeson used a long straddle strategy on the Nikkei 225.
C
Leeson held speculative double short positions in the market for Nikkei 225 futures contracts.
D
There was ambiguity concerning who was responsible for performing specific oversight functions.
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