Ward's Book of Days.
Pages of interesting anniversaries.
What happened on this day in history.
FEBRUARY 26th
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.
©2006 Ward’s Book of Days