Whatever Happened at Barings Essay Example | Topics and Well Written Essays - 500 words

Whatever Happened at Barings - Essay Example 3. The systemic damage of the international banking system was not that big to be regarded as significant because Barings was not a big banking organization and its failure could not substantially affect the international banking (Hughes and MacDonald). 4. â€Å"Big Bang† is a terminology used for the changes in relation to financial regulations, which took place in the late 80s. These changes were primarily related to the operations of the financial institutions and activities of the City of London, deemed as the hub of UK’s financial activities. The crucial deregulatory steps taken for the LSE (London Stock Exchange) initiated some changes. Barings, upon the occurrence of Big Bang, unlike its competitor organizations, did not make efforts to develop a well integrated investment bank (Hughes and MacDonald). 5. The major problems faced by financial services organizations were fixed commissions, lack of a competitive environment and access to other markets for taking part and operating in other parts of the world. In lieu of these problems, Big Bang was introduced, which liberalized the stock markets, particularly the London Stock Exchange (Hughes and MacDonald). 6. After this whole story was unwrapped, it became clear that the management lacked the required monitoring strictness in relation to securities; and at times management was seen as confused. These factors contributed in the demise of the firm (Hughes and MacDonald). 7. There are various strategies used by speculators to trade future contracts and amongst the strategies adopted the most common include â€Å"going long†, â€Å"going short† and â€Å"spreads†. â€Å"Going long† refers to the strategy according to which an investor makes an agreement for buying and delivery at a particular price at the moment when a future price rise is expected. On the other hand, the â€Å"going short† strategy refers to such an agreement by the investor under which he agrees to sell at an early date in order