§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer, pursuant to his oral statement on Barings of 27 February,Official Report, column 693, what he has to add to his statement in respect of his comment that the unauthorised derivative positions in Barings Singapore were built up in a matter of days; and if he will make a statement.
§ Mr. Nelson[holding answer 6 March 1995]: I have nothing to add to what my right hon. and learned Friend the Chancellor of the Exchequer told the House on Monday 27 February. He has asked the Board of Banking Supervision to investigate fully and urgently all aspects of the Barings episode and to report back to him.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what were the responsibilities of Mrs. Lisa Leeson within the back office of Barings Singapore; and if they included the settlement of derivative trades undertaken by traders within Barings Singapore.
§ Mr. Nelson[holding answer 6 March 1995]: This is a matter for Barings.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what information he has as to the trading limits imposed upon Mr. Nick Leeson of Barings Singapore by Barings.
§ Mr. Nelson[holding answer 6 March 1995]: None at the moment, but as my right hon. and learned Friend the Chancellor of the Exchequer told the House on Monday 27 February, he has asked the Board of Banking Supervision to investigate fully and urgently all aspects of the Barings episode and to report back to him.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what were the dates on which the large unauthorised derivative positions build up recently by a trader at Barings in Singapore first became known to(a) Barings managers in Singapore, (b) Barings managers in the far east, (c) staff in the London office, (d) Barings management in London, (e) staff at the Bank of England, (f) staff at Her Majesty's Treasury, (g) the Governor of the Bank of England, (h) himself and (i) the Prime Minister.
§ Mr. Nelson[holding answer 6 March 1995]: I do not have the information on (a) to (d). For (e) to (i) the date in each case was Friday 24 February.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer (1) on what occasions Barings London treasury department, or any other entity within Barings London, arranged funding for any of the recent unauthorised derivative positions initiated by a trade at Barings in Singapore;
(2) on what date a team of staff from Barings in London flew to Singapore to investigate the large derivative positions which were recently taken by a trade in Barings Singapore and which resulted in the collapse of the bank.
§ Mr. Nelson[holding answers 6 March 1995]: As my right hon. and learned Friend the Chancellor of the 267W Exchequer told the House on Monday 27 February, he has asked the Board of Banking Supervision to investigate fully and urgently all aspects of the Barings episode and to report back to him.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what regulations exist to control the percentage of contract open interest which may be accounted for by any one trader or entity, on the futures exchanges in(a) London, (b) Tokyo, (c) Singapore and (d) Chicago; and if he will make a statement.
§ Mr. Nelson[holding answer 6 March 1995]: The answers are as follows:
London:
there are no limits on the open positions that may be taken by persons dealing on recognised investment exchanges in London. Transactions on the London, International Financial Futures and Options Exchange, the London Commodity Exchange, LCE, the International Petroleum Exchange, IPE, and the London Metal Exchange, LME, are cleared through members of the London Clearing House, LCH, which regularly monitors its members' margin requirements against their capital. The LCH and the four exchanges also monitor large positions of their members at contract level. The OMLX exchange carries out a daily position and margin review of all its members.Chicago:
two US futures exchanges based in Chicago are recognised as overseas investment exchanges under the Financial Services Act 1986. They are supervised by the US Commodity Futures Trading Commission whose regulations have included provisions for limits on open positions for a number of years.Tokyo and Singapore:
there are no exchanges operating in these centres which are recognised as overseas investment exchanges under the Financial Services Act 1986. Questions about the regulations applying to exchanges in these centres should be addressed to the relevant authorities.