Schenk, C. (2017) Rogue trading at Lloyds Bank International, 1974: operational risk in volatile markets. Business History Review, 91(1), pp. 105-128. (doi: 10.1017/S0007680517000381)
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Abstract
Rogue trading has been a persistent feature of international financial markets over the past thirty years, but there is remarkably little historical treatment of this phenomenon. To begin to fill this gap, evidence from company and official archives is used to expose the anatomy of a rogue trading scandal at Lloyds Bank International in 1974. The rush to internationalize, the conflict between rules and norms, and the failure of internal and external checks all contributed to the largest single loss of any British bank to that time. The analysis highlights the dangers of inconsistent norms and rules even when personal financial gain is not the main motive for fraud, and shows the important links between operational and market risk. This scandal had an important role in alerting the Bank of England and U.K. Treasury to gaps in prudential supervision at the end of the Bretton Woods pegged exchange-rate system.
| Item Type: | Articles |
|---|---|
| Additional Information: | ESRC RES-062-23-2423 |
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Schenk, Professor Catherine |
| Authors: | Schenk, C. |
| College/School: | College of Social Sciences > School of Social and Political Sciences > Economic and Social History |
| Journal Name: | Business History Review |
| Publisher: | Cambridge University Press |
| ISSN: | 0007-6805 |
| ISSN (Online): | 2044-768X |
| Published Online: | 12 April 2017 |
| Copyright Holders: | Copyright © 2017 The President and Fellows of Harvard College |
| First Published: | First published in Business History Review 91(1): 105-128 |
| Publisher Policy: | Reproduced under a Creative Commons License |
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