Explain how Barings' "top up" payments contributed to the bank's eventual downfall
What will be an ideal response?
Barings London made "top up" payments to BFS, which means these payments were made without the settlements department in London knowing which specific clients' accounts should be debited. Barings needed to match customers' transactions with specific transfers if it wanted to charge interest on these loans. Leeson's supervisors in London and Singapore were fully aware that customer accounts should be reconciled with margin payments. By making these blind payments to BFS, Barings London financed Leeson's speculative activities. Without such funding, Leeson's activities would have been detected sooner.
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Fill in the blank(s) with the appropriate word(s).
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