The Present Israel Crisis, July 2014

People all over the world seem to be fuming over Operation Preventive Edge being launched by Israel to attack Hamas militants in Gaza. In the ensuing attacks, hundreds of Palestinians have been killed, mostly civilians. Many people are blaming the Israelis for being atrocious and brutal and not respecting human rights.

However much I detest the killing of innocents in a war, I cannot help but having sympathy for the Israelis. The situation is not easy. Gaza is controlled by Hamas, whose constitution demands the total obliteration of the Israeli state. They try and attack Israeli civilians whenever they have the opportunity. But the problem arises when Israel responds to such attacks and decides to bring the perpetrators to justice. Hamas quickly hides behind civilian cover. They use human shields to protect themselves and fire rockets from heavily populated urban areas where it is virtually impossible to hit them without getting civilians killed. They even hide weapons in schools and hospitals knowing well that Israel would generally avoid bombing them http://www.thestatesman.net/news/67507-UN-Chief-outraged-at-weapons-found-in-UN-school-in-Gaza.html . Thus, whenever Israel tries to attack a militant who has taken cover behind civilians, some civilians are killed in the process. The whole international community then jumps up to admonish Israel and call it names. What about the fact that even in the 21^st century, a country refuses to acknowledge another country but rather vows to destroy it completely? Iran has vowed to eradicate Israel from the map and has openly supported Hamas militants and encourage them with words and deed to keep attacking Israel.

When faced with such a situation what would you do? Will you refrain from attacking the militants who keep firing rockets at your citizens, or keeps murdering them, because attacking them will kill other civilians? Will you stand with hands in your pocket as others around you vow to kill you? Or will you act for your self-preservation? Will you try to remove the threat that you face? Israel is doing what it has to to survive. It is militarily more powerful than Hamas so their action is much larger in scale than Hamas, and therefore comes under scrutiny. Israel did agree to a ceasefire but Hamas refused. Does Hamas not care for the lives of the Palestinians in whose name they fight? Israel seems ready to stop this carnage but Hamas is not.

It is time we stood back and took stock of the whole situation instead of jumping to the same conclusion every time violence breaks out in Gaza vis-à-vis that Israel is murdering Palestinians in cold blood. It is time we acknowledge the breaches committed by Hamas of both human rights and international laws. Israel is right to suspect the verdict given by any UN investigation of the situation as every other time in the past the international community has been swift to blame Israel for every escalation in violence in that area. Maybe Israel is to blame for using more military might than necessary, but that does not mean that the entire international community just sidesteps the role that Hamas has played in escalating the violence and continuing to endanger the lives of the common Palestinians whom they proclaim to be fighting for. It is time we called a spade, a spade.

The World Cup Fever

"Competence is one of the most underrated qualities in life" -Patrick Neate

Ukraine Burning: Peaceful Protests, Riot Police and Democracy

A demonstrator waves the Ukrainian flag as the riot continues.

Ukraine is boiling in the midst of anti-government protest and a river of blood flows at the Maidan Square where the Ukrainians are protesting against the government with clashes between them escalating. The Ukrainians are calling for peaceful protests but alleging that the government is using violent means to curb the protest. At this stage it would be a good idea to look at what has led to such a crisis in Ukraine.

An Orthodox priest prays between the police and anti-government lines.

President Viktor Yanukovych of Ukraine, who belongs to the Party of Region, had been promising the citizens that he was eager to sign an Association Agreement with the European Union that would create closer economic and political ties between the EU and Ukraine. Ukrainians were eagerly looking forward to the signing of this treaty. But Russia was not too happy with the prospect of Ukraine allying with the EU as Russia wanted it to join its own union. Thus, Russia started applying economic sanctions on Ukraine. Ukraine depend heavily on Russia for its supply of natural gas and oil and feared an escalation of prices. On 21^st November, 2013, President Yanukovych suspended talks with the EU over the agreement and signed a treaty with Russia by which Russia promised to buy a substantial amount of government bonds and subsidize oil and gas prices.

A banner mocking Russian President Vladimir Putin at the protesters' camp in central Kiev.

Tens and thousands of protesters, mostly students and middle class people, poured into the Maidan Square, which had been the center for the Orange Revolution in 2004 that had kicked Yanukovych from his then post as Prime Minister, to protest against the government’s decision not to sign the agreement with the European Union. President Yanukovych responded by passing ananti-protest legislation that prohibited the use of loud speakers, among other stricter measures, without prior police permission. Protests erupted anew in response to this legislation and the protesters started demanding a change in the political power structure of the government as they felt that a lot of power was vested in the hands of the President.

Protesters hurl Molotov Cocktails at the police, who responded with stun grenades and rubber bullets.

Riot police throwing petrol bombs or Molotov Cocktails at protesters.

Medics evacuate an injured.

As anti-government protests swelled and people started putting pressure on the government with the Opposition joining in, the President responded by ordering riot police to crackdown on the peaceful protestors at the Maidan Square. (This might have been President Yanukovych’s revenge for his ousting from power via the Orange Revolution in 2004 that had also started at the same place, the Maidan Square) This led to bloody clashes between the protestors and the authorities. Many have been killed and thousands injured with the government deploying truncheons, tear gas, stun grenades, and rubber bullets (some allege that live ammunition has also been used) to combat the protestors. But instead of subduing the protestors and their democratic zeal, this has only strengthened their resolve to seek a change in the government and the power structure of their country. Even though the Ukrainian government, including Prime Minister Mykola Azarov, resigned on 28^th January, 2014, President Yanukovych still is in power and his authoritarian power was amply demonstrated when in February, a few days back, he ordered crackdowns on the peaceful protestors leaving many dead and hundreds injured. The protestors did respond to the crackdowns by retaliating, throwing bricks and bottles at the police and the riot police. Protestors are now calling for everyone to be peaceful in their protest despite the actions of the government.

Smoke rises over the centre of Kiev as opposition supporters set fire to tyres.

Heavily armoured protesters shield themselves from police fire amid flaming barricades.

As Ukraine burns, we the citizens of the world look on; we, who call ourselves liberal and espouse democracy, just speak of high ideals while innocent people are dying and being injured in trying to live these ideals. Where are those that were so eager to give democracy to the people of Iraq and Afghanistan? What are they doing now when the people of Ukraining are fighting for democracy and human rights? Are the democratic rights and freedoms of the Ukrainian people not so important because they lack economic value? It is easier to fight when your own tail is on fire but it is the mark of humanity when you fight for the rights of others. This is the time for action and be inspired by the zeal and ideals of the Ukrainian people – this is the time to act.

Anti-government protesters gesture at a barricade.

[Photographs: The Telegraph]

The Tibetan Crisis

With the Syrian crisis and other conflicts raging around the world the attention of the world leaders, the world media and the people in general has been diverted to the refugee situation in these areas. But these conflict torn regions are not the only ones whose inhabitants have to suffer the tragedy of being driven out of their homeland and become refugees. Attention nowadays seems to have been diverted from a major crisis situation that has led to most of the people from that land becoming refugees in others vis the Tibetan crisis.

The Tibetan crisis has been successfully suppressed by the Chinese government from making the media splash that other conflicts seem to have, while being far more disastrous than quite a few others. China, using its military might has been trying to eradicate the centuries old culture, tradition, religion and language of the Tibetan community. Not being just satisfied with the occupation of Tibet, China is doing everything in its power to consume the Tibetan tradition with its state-driven policies. The Chinese military occupation and state-sponsored terror in the region has forced most of the Tibetans to move out of Tibet and seek refuge in other countries, mainly in India.

In India, the Tibetan community, under the leadership of the Dalai Lama, its religious leader, has created the Tibetan Government in Exile with its headquarters in Dharmashala. Here the Tibetan refugees have endeavoured to protect and sustain their centuries old traditions, religion and language. But their condition as refugees is not something to be proud of. Tibetan refugee camps are spread across many cities in India and the condition of these camps is dismal. The squalid living conditions, the poor sanitation and he lack of social and cultural integration into the local community is a major problem that the Tibetans have to face in their everyday life. There is hardly any effort from the government to help them integrate or to provide schemes for their economic development. Tibetans have been engaged in menial labour in the cities and their condition is deteriorating over the years.

With so much international effort being put into combating problems faced by refugees around the world, it is time that the international community pay more attention to the refugee situation in Tibet. China has so far been able to divert attention from Tibet but it is time that this changed. The Tibetan refugees  have been suffering for too long and it is time we, as the people of the world, as global citizens, did something about it. 

Philip Seymour Hoffman: Ode to an actor

Awesomely powerful - is all that I can say about Philip Seymour Hoffman's acting. He was brilliant in all the characters he played, breathing life and spirit into each and every one of them. The first time I encountered Philip Seymour Hoffman was when I watched the movie Synecdoche, New York (2008). I was left stunned by his very natural and powerful acting. This led me to watch his other movies like Before the Devil Knows You're Dead (2007), Scent of a Woman (1992), Owning Mahowny (2003), Charlie Wilson's War (2007), The Savages (2007), Boogie Nights (1997), Twister (1996), Boogie Nights (1997), The Big Lebowski (1998),Patch Adams (1998), Magnolia (1999), The Talented Mr. Ripley (1999), Almost Famous (2000), Red Dragon (2002), 25th Hour (2002), Punch-Drunk Love (2002), Cold Mountain (2003), Moneyball (2011), The Ides of March (2011), Doubt (2008) and The Master (2012); not to mention Capote (2005) for which he won the Oscar for Best Actor. In each and every one of them he never failed to impress me with his acting irrespective of the prominence of his character. He was also quite famous in the theater circle as a director and actor, but I have not seen any of them so far. 

I will definitely miss his presence on screen and, I am sure, so will others all over the world. I sometimes wonder why such talented people die so young - does not seem to be right. I am a bit late in writing this in tribute of this great actor but better late than never. Here are a few images from his life.

Origins of the Hijab / Turban

      Walking down the roads of Berlin you come across people from all over the world and listen to so many different languages. One of the things among these that you will notice is Turkish women wearing the hijab. I have always just noticed that and walked on without another thought. But recently I have been wondering why is it that certain societies have taken to turbans and hijabs while others have not. I tried to search around in the internet trying to find an answer to my question but came up with only with the different types of head-dresses in existence (and extinct) some of which I had never heard of before. So I put my grey cells into action and came up with a very satisfactory explanation for this phenomena.

     According to my theory, head-dresses, especially the turban and hijab are closely associated with the traditional geographical location of the society or community. If you take a closer look at the geographical origins of people who wear turbans and hijabs, you will notice that they almost always originate from arid regions of the planet. It is people from Afghanistan, Saudi Arabia, Iran, Iraq, Saharan and sub-saharan Africa, Punjab, and such other arid places who have taken to these kinds of head-dresses.

     Coming from an arid region where the availability of water is limited, if not scarce, bathing too often is a luxury they could not afford. The region being arid also meant that there was always dust and sand being blown about by the wind. In such an environment keeping long hair open would only make them dirty, thus requiring frequent washing. To reduce the necessity for frequent baths in a region with limited water supply, it was a very natural move to cover one's hair. Since women generally have longer hair than men, it becomes more necessary for them to keep their hair covered in such conditions. The covering of the hair, thus originated as a response to the environment, which has, over the years been assimilated into the culture of the people originating from these arid areas. Over years, the turban and hijab became a part of the identity of the respective communities and societies.

     I will refrain from providing empirical data sets and statistics, as I believe they just complicate and narrow our perception of the issue at hand, and it is the broader picture that we need to keep in mind. I am not saying that my theory has no holes in it, just that I have not been able to notice any so far. I would be really glad to know your opinion regarding this and whether you have any alternative theories to suggest.

[Photos: courtesy the internet]

Berlin Vibes on a Saturday Night

Saturday nights are generally very busy in Berlin. The roads, in certain areas, are packed with people going or coming back from a bar or a club, food shops packed with hungry people gobbling on different kinds of food, and all these interspersed with groups of people chatting loudly - overall a very lively atmosphere. Yesterday I decided to join in this atmosphere of merriment and joviality. Three of my brother's friends were in town for a career fair and they were polite enough to invite me out for drinks with them. I thought that I would just join them for a beer and then come back home and let them explore the night-life.

I met the gang at this bar called Via Nova on Revaler Strasse near Warschauer Strasse station. The fact that they had chosen that bar to hang out told me that they were not at all familiar with the city. Via Nova is a nice bar with very nice staff, including some very cute girls, but it is not a bar that a person living in Berlin would go to. Nonetheless, we had a nice lively discussion there among ourselves and soon it turned to the topic of what they would do after going out of that bar. They wanted to explore the 'cool' places in the city but did not have any idea of where exactly to go. They also wanted to meet up with their friends who had also come to the fair but were somewhere else but somehow that did not work out. So I ventured an invitation to show them a few places in Kreuzberg, where the main 'action' is and they were very happy to accept my offer.

Coats on, we started off for Oranienstrasse as I know a few nice bars there. Our first halt was the gay-bar called Roses (about which I have written in a previous post titled The Pink Explosion. I thought it would be an interesting place to experience for someone not familiar with the diverse Berlin culture. Roses did not fail to become an instant hit. They were struck dumb by the decor and the ambience of the place and would have buried themselves there for the night had it not been for the lack of an inch of space to stand.

Our next halt was a bar at the corner of the road called Bateau Ivre. It is a nice quaint place which is very crowded in summer as they open up the windows and people can sit outside and have a pleasant experience. The hefe beer here is quite good. The interior of the bar is also very cosy. My brother's friends also liked this place but then again we did not find a place to sit here and so we decided to leg it from there.

My next suggestion was the bar called Luzia which is quite a popular bar in this neighbourhood. It is a kind of a mix between a bar and a club. There is a room to the left of the bar where there are DJs playing Elektro music and people smoking and dancing on the floor. There is also an option to climb up on a balcony sort of space that overlooks the dance floor - kind of cool actually. It is always crowded but the ambience is nice. The gang loved this place and decided to brush shoulders with strangers while sipping on their drinks.

These kids were fascinated by everything they saw in Berlin on this Saturday night and did not fail to express it. They stared at people on the streets, took random photographs, and wowed at every little thing that caught their fancy. They had never experienced such a diverse bar culture anywhere else and had never been offered so many alternatives. As I spent more and more time with them yesterday and as they involved me in their admiration for Berlin, I realised sadly that a certain spark has gone away from my life - the awe and fascination of meeting head-on the night-life in Berlin. I have become used to the diversity and alternate culture of this vast city. Make no mistake, I am still fascinated and engrossed in this environ, but that feeling you get when you experience it for the first time is not there anymore. This city has successfully absorbed me into its midst and now I am a part of this epic.

Namaste: A Greeting Gone Wrong

Namaste everyone,

When you travel in the western world and tell people that you come from India or when you meet someone who has got some introduction into yoga, they often say 'Namaste' at the end of the conversation just like they would say 'goodbye'. I have tried to ignore it for a very long time but now I have decided to put an end to this misconception about the term and its use.

Namaste, which is also called Namaskar or Namaskaram, is a greating performed when you are meeting someone, or written at the beginning of a letter while addressing the person.  The spoken word is always accompanied by the folding of the palms. You always say 'Namaste' when you meet a person but you do not need to say it at the end - just a simple 'goodbye' with the folded-palm gesture is sufficient.

Through the use of this term you show respect to the better nature of the person concerned or to the divine spirit inside him. Hindu philosophy believes that every human being has a divine spirit inside them, and 'namaste' is the term with which we show respect or bow to that spirit. Mostly younger people say it first to an older person while a host says it first when meeting a guest.

The folding of the palms is done by joining the palms together with fingers pointing upwards, placed in front of your chest. This always accompanies a 'Namaste'. A simple folding of palms without the spoken word also means 'Namaste' but just saying the word 'Namaste' without the folded palms means nothing at all. So most people in the Indian culture say 'namaste' when they meet each other and just fold their palms and say a 'goodbye' when they part. This folding of palms also shows respect for the other person and the higher you place your palms from your chest, the more respect you are trying to show. Thus, many a times while praying to god you put your palms together above your head as high as you can go, to show respect and devotion.

People I meet here who do not know the Indian culture so well shakes my hand and says a 'hello' and at the end of the conversation says a 'namaste' or they write 'namaste' at the end of their email. I do appreciate their effort at trying to know the Indian culture and using it in their daily life - as I believe that 'namaste' is a very beautiful thing to say to a person whom you meet - but this consistent wrong usage does sometimes bother me.

So I request everyone out there who want to use this term, use this term in the right way, the way it is meant to be used - as a greeting when you meet and not only when you say a 'goodbye'.

P.S.: It is surprising that when I searched Google for images related to 'Namaste' most of the images are of women greeting and rarely did I come across the image of a man greeting. Obviously both men and women greet and say 'Namaste' in the same fashion, but somehow there is a lack of images of men greeting on Google. The feminists out there might have something to say about that.

[Image courtsey: Google search]

The Pink Explosion: A Friday Night in Berlin

Friday nights are nights when the whole of Berlin is outside going to pubs and clubs. I join in the crowd sometimes and do enjoy my time out there. Yesterday, like any other Friday night, I went out with a friend of mine to try out some different bars than what we usually go to.

Our first target was the area around Warschauer Strasse. We roamed around in the streets a bit trying to find a bar that we liked. We found two but they were so crowded that we decided to go somewhere else. So our next choice was to go down to the Kottbusser Tor area as the bar scene is quite good here.

There are so many bars at Kottbusser Tor that anyone would get confused which one to go into. As we roamed around aimlessly - still without any beer and it was already an hour since we had left the house - every bar seemed to call out to us. But then we were looking for something that neither of us could explain. We stood in front of every bar we passed, checked out the place from outside, looked at each other, shook our heads and walked on.

As we were heading down Oranienstrasse, on the verge of deciding to just go into some shop and grab a beer, we came across this strange doorway. The wall outside was quite gawdily designed and you could not see inside. There was also the image of a rose hanging on top of the door. Now this was very different from any of the bars we had come across and the whole setting increased our curiosity. We decided to go in for a drink - but had no idea what awaited us inside.

The moment I pushed open the door and entered, there was an explosion of pink! The whole place was pink in colour and disco balls sent spots of lights flying all over. The bar was right in front of me and the place was crowded with so many people. The walls and ceilings of this bar was covered in pink fur, there were disco balls everywhere, and it did not take me too long to figure out that it was a gay bar. Never having been at a gay bar before I was not sure whether there were any rules or not. Both of us decided that we would stay for a drink and check the place out for a while.

Rose - this is the name of the bar that I later came to know - seemed like any other bar when it came to the people. There were people of all ages, but mostly young people, quite a few tourists, and quite a few straight people too. The beer collection here is not that great but they have a good collection of whisky and other hard drinks. The place stretched in behind the bar, where there were tables to sit and a large wall portrait of Madonna and someone else dressed as Marilyn Monroe. The music was especially good. I am not a fan of techno but I enjoyed the tracks they were playing - mind you, I was still on my first bottle of beer so I was quite sober and still I enjoyed it! The bartender, Gabriella, is a really cool woman. She was dancing to the tracks behind the counter and passing funny comments here and there. The atmosphere all around was very friendly and jovial.

After a while, I started to really like this place so we decided to stay at Rose for the rest of the time. We had four beers; and two shots on the house. We also met a Taiwanese guy who has been living in Berlin for the past 6 years and he gave us a quick info on all the gay bars and clubs in Berlin. Overall, it was quite fun being there. If you ever come to Berlin, just walk down to Rose and check it out. You may not like it, but it is worth a visit, just to get that pink explosion when you walk in.

Tabu: A Talent Less Known

I have been watching movies ever since I was a child, but over these years I have come across very few talented actresses. The main reason for this perhaps is that women hardly play the lead character in a movie or have ample coverage of their character that would require a good quality of acting. This is more so in Bollywood I believe, where the actress is there just to look pretty and be saved by the hero. But among all the actresses I have come across, I have found Tabu one of the best actresses in Bollywood. She is not only pretty, but her talented acting makes these movies come alive. But not many people talk about Tabu these days and she seems to have been pushed to the side.

Tabu, whose real name is Tabassum Hashmi, has won the National Film Award twice (Maachis and Chandni Bar) and holds the record for most wins of Filmfare's Critics Award for the Best Female Performer with four. The best film I love of her is Maachis (Matchstick). She does a stunning performance in that movie. Another movie I find very good is Cheeni Kum (Less Sugar). Most people I meet are not very familiar with her performance so I thought it would be a good idea to introduce such a talented actress to the world. There are more movies scheduled to come out in the near future starring Tabu and I look forward to watching Tabu perform again and keep me spellbound for the whole time.

[Photos: Internet Image search :) ]

Beyond The Hills / Dupa dealuri (2012)

Religious superstition is a part and parcel of everyday life in any and every society around the world. Despite economic growth, despite the wide use of technology, and despite the global enthusiasm to study ‘science’ and medicine, we still believe in religious superstition. This is especially strong in Indian societies. Even though Indian parents, who are engineers or doctors or IT professionals, want their children to pursue a career in science and medicine, they still put the odd flower petal from the foot of the gods and goddesses into their pockets before any exam. Religious superstition is still a part of our life even though we fail to notice them.

Beyond The Hills draws our attention to such religious superstitions. Narrating the story of two girls’ encounter with religion and religious superstition, which leads to the death of one, it makes us more sensitive to our society. Deaths caused due to religious superstition are not unique to Romanian society but is widely prevalent in almost every society – just that they are not that widely publicized. In India, people in the rural areas, and sometimes even in the urban areas, are often drawn to religion to provide solution to their problems and these solutions often lead to death or serious health hazards. Religious godmen are quite prevalent in Indian societies, who look upon any illness or misfortune as an act of a spirit! They perform various rituals, some barbaric, that often leads to death, maiming or serious health hazard. One of the very common methods of getting rid of illness, as used by these godmen, is to sprinkle the person with boiling oil and thrashing him/her with a stick!

When I saw this movie, I could easily associate myself with the narrative and the characters. It seemed that I was seeing my own society being depicted on the screen – just in a different language! This brilliant movie deals with a real social issue – a controversial issue as most societies suppress such deaths to protect their image, to show that they are developed. Christian Mungiu has cleverly portrayed this issue without directly attacking religion or religious belief, but has focused our attention solely on the issue of religious superstition. Without any sub-plots to distract our attention and with a simple and strong narrative, the movie touches our hearts, irrespective of geographical location. Cosmina Stratus and Christina Flutur, two fresh faces, deliver a powerful acting that brings the story to life and they deserve the Best Actress award they received at the Cannes Film Festival.

Though many call this movie disturbing, this movie has made me think. This movie makes me feel that my society is not the only one that suffers from the ill effects of religious superstition in this age of technology but there are others. This gives us courage to accept these social evils and address them at a public level instead of just shoving them beneath the carpet just to look modern. Beyond The Hills has a massive international appeal and is a movie that I would ask everyone to watch.

The Barings Bank: The British Economy at Play

[Not many people are interested in going into the depths of economic issues as they are always shrouded in terrifying terminologies and a maze of numbers. But I have attempted to take a very important issue out of this confusion and put it in simple terms so that it is abundantly clear what goes on behind the scenes.]

Nick Leeson in his heydays.

In 1995 one of the biggest banking houses of Britain, the Barings House collapsed due to the reckless activities of a single ‘Rogue Trader’, Nick Leeson. This spectacular collapse has been blamed on several factors – the lack of a proper hierarchy of command and control, a lack of proper risk management systems, greed on the part of Nick Leeson and the officials at Barings, and on the ignorance of the upper management about the securities market. Even though all these factors influenced what was to become the most catastrophic collapse of a financial institution in Britain in the twentieth century, to understand the collapse it is necessary to understand the economic condition of Britain during the first half of the 1990s, as it was the prevailing economic conditions that influenced decisions being taken at the Barings Bank and at the National level that would ultimately lead to the collapse.

The Barings Bank, which was the oldest merchant bank in Britain and boasted as its clients, the Queen, had an office in Singapore called the Baring Securities (Singapore) Limited (BSS) that was trading on the SIMEX (today’s Singapore Exchange). Nick Leeson, who was working in the back office in the Barings Bank was made the general manager of BSS and was also given responsibility of the back office in 1992. He passed the necessary exams and also became the head trader in the Singapore branch. He began to carry out unauthorized speculations in the futures “linked to the Nikkei 225 and Japanese government bonds (JGB) as well as options on the Nikkei”. The Barings Bank did not allow its traders to invest its own capital in the market but rather to invest its customers’ capital at their behest. Nick Leeson began to speculate in the market using the capital of the bank using an anonymous client as an excuse. All the losses he incurred was hidden in the error account 88888. By the end of 1993 the account was losing 23 million pounds and by the end of 1994 this had increased to 208 million pounds. With his control over the back office he was able to subvert the losses and show only profits which made him a star trader of the Barings Bank. As his losses in the 88888 account mounted, he asked more and more money from the London office, which was provided to him without much questions. The disaster came to the notice of the Barings management only on the 23^rd of February 1995, when Nick Leeson went on the run and did not come to office – the error account now showed a loss of 875 million pounds. By the end of February the Barings Bank had been declared bankrupt and sold off to the Dutch company, ING, for the value of one pound. Nick Leeson was arrested for fraud and imprisoned. 

It is beyond doubt that it was the speculations of Nick Leeson that caused the collapse, it is what allowed him to do so that has interested us. Official investigations and academic research into this collapse of the Barings Bank have brought to light many reasons behind this. It has been pointed out that there was an absence of proper checks and balances in the workings of the bank that allowed Leeson to trade and manage the accounts in the back office at the same time. Also, there was a lot of ambiguity in the command structure that made it unclear who Leeson had to report to. Since there was more than one person who was responsible for parts of his duties, he was able to play one against the other to his advantage. The greed of the management has also been regarded as a factor behind allowing Leeson to continue trading even while asking for huge sums of money to be transferred from London. He was showing huge profits to the company, based on which the employees were getting their bonuses – no one seemed to have any reason to question this unbelievable profits, putting them down to Leeson’s better knowledge of the securities trade and his ability as a trader.

The above mentioned reasons were definitely responsible for the collapse of the oldest bank in Britain but I believe that we have looked at this issue from a very narrow perspective, focusing only on the circumstances of the bank. To understand the reason behind why the bank reacted to Nick Leeson and his trading in such a way, it is necessary to take a much broader look. We need to look at the British economy at that time.

The beginning of the 1990s saw a severe recession in Britain and a steady rise in inflation from 1993 to 1995. Added to this was the humiliating exit of the pound from the European Exchange Rate Mechanism in 1992 that made matters worse. The positive outlook that had prevailed over the last decade seemed to have come to an end. There was also large scale unemployment. The Bank of England was still under the government and was charged with controlling inflation. In this economic turmoil the profits that the Barings Bank was making through Nick Leeson’s trading in Singapore came as a blessing. The high profitability of the investment of the bank in the growing markets of the East provided a beacon of hope. The Bank of England also refrained from intervening into the financial matters of the bank and gave the managers an open field. Being the only sector making such huge rofits during 1993-1994, no one questioned the authenticity of the presented profits or the risks involved. The management also became complacent and let matters stand as they were.

Investigations and research into the collapse of the Barings Bank have not at all regarded the economic environment of Britain during this time. There is a need to understand how the economic climate of a nation influences business decisions across organizations – in this case, how it influenced the Bank of England’s and the Barings Bank’s management decisions that allowed them to be so complacent. There was definitely a lack of financial risk management mechanisms, management control and human ego and greed involved in the financial fraud that led to the collapse of the bank, but it would be an error to omit looking at the influence that the British economy had on the decisions taken by the management of the organizations. Such a broader perspective, coupled with the narrower perspectives will help us understand the issue in a more holistic way, and may even provide us ways to better understand economic decision making.

[Image source: http://www.deadgoodbooks.co.uk/index.php/on-this-day-in-history-march-2nd-1995-rogue-trader-nick-leeson-arrested-for-fraud/ and http://www.arbitrarytweets.com/nick-leeson/]

A Long Break

It has been a long time since I have published anything here on my blog. It is really a shame but I got caught up in things that are not that important and yet keep you tied down. In these past two years, many changes have affected my life and the life of others. I have shifted my base from India to Berlin to study and then have visited various areas of Europe, and now struggling to finish what I have started.

Many people might look at this as a struggle and sometimes even I am driven towards looking at life as a constant struggle. But then I realise that this is all an adventure, with its innumerable ups and downs and defeats and victories. I want to see this adventure through with the same sprite and joy in my heart as when I started it. Many adventures await me and many experiences to gain. I shall tell you all and try and make you a part of this amazing, simple adventure.