David Coombs: UK financials - back from the brink?

Last week I was wheeled into our mentee investment managers' programme as the ‘wise old git' asked to deliver a session on idiosyncratic risk - during which I outlined the types of risks no amount of quant analysis can show up. To help illustrate my point, I described my own financial crisis while working for Barings Bank in 1995, when it failed due to the actions of a rogue employee. A systemic failure of controls and common sense helped facilitate the actions of Nick Leeson. This of course was not on the same scale as the global financial crisis and yet the same lack of common sense...