Nick Leeson, the rogue trader who brought down Barings, talks money.
Nick Leeson, 45, is the original rogue trader. He lost £862m betting on the markets in 1995 and brought down Britain's oldest investment bank, 233-year-old Barings He then spent four years in a Singapore jail before being released early with life-threatening cancer.
Liquidators personally chased him for £100m and he was limited to earning less than £3,000 a month to stop them taking a cut. They stopped chasing him in 2005 and he earns about £80,000 a year the majority comes from after-dinner speaking.
He lives near Galway, Ireland (Xetra: A0Q8L3 - news) , with his second wife, Leona, 37, son Mackensey, eight, and stepchildren Alex, 13, and Kersty, 17.
How did your childhood experiences influence your attitude to money?
We lived on a council estate in Watford. My father was a plasterer and Mum was a nurse and carer. Money was always tight but I never wanted for anything. We had a rented television that took money but always seemed to have enough coins to watch what we liked. My parents were good, honest, working-class people who believed in only spending what you have. It taught me the true value of money. When you forget about this, problems can occur.
What was your first job?
I had a paper round. I was not an entrepreneur but liked to earn my own money. At school I saw a trainee job advertised with Coutts bank and thought why waste time with university when I could earn some cash straight away? I immediately fell in love with the City. It was the Big Bang era and very exciting. By the age of 22 I had been headhunted by Barings and was after new challenges which is how I got to be trading in Singapore.
Are you a spender or a saver?
I am not that flash with cash. There is a perception that City boys all drive around in fast cars and enjoy throwing their money around that is not me. When I was working abroad I also preferred the company of locals rather than hanging out with the expats. I am not that materialistic and drive a Vauxhall Astra.
How did you gamble away Britain's oldest merchant bank?
I make no excuses about what I did it was wrong and I feel remorse. But I am no crook and was just trying to put things right. It had started when I tried to cover for a junior colleague who lost £20,000 on the trading floor. The bets were not for personal gain. I was given too much freedom to play with too much money it should not have been allowed. I was not the gambling "barrow boy" portrayed in the media but someone who wanted to stay in control.
What lessons has the industry learnt from the downfall of Barings?
Barings was to have provided a wake-up call for the banks but it obviously failed although regulations have tightened up.
The central bank and regulatory authority could still do a much better job. The Financial Services Authority employs far too many staff and has lost its way by getting too bloated and bureaucratic. With a leaner, more focused outfit it could afford to pay enough to attract more talented staff who prefer to be employed on the trading floor. There needs to be scrutiny of the industry before things go wrong rather than reaction after the event.
Does money make you happy?
I had a lot of time to think about this during four and a half years at the notorious Changi prison in Singapore. It was a tough place to survive in as the only Caucasian and being surrounded by a tough gang culture. During my time in prison I found I had life-threatening cancer and my first wife also left me. There were many hours to reflect on who I was and how I had arrived at this situation. Money has never been my motivation. It is family that makes me happy that is my most cherished possession but I will not deny that having money makes family life easier so it can certainly help you be more content.
Should those responsible for causing the recent banking crisis face criminal charges as you did?
Yes. I think there is a tendency to vilify individuals like Bob Diamond but this masks the underlying problems that still exist. He was right to go but the culprits involved in fixing the Libor interest rates should be held to account in the criminal courts because basically they have been involved in false accounting fraud. There are other areas such as payday loans and high interest loans that are allowed to flourish but blight our society.
It is wrong that vulnerable people who do not understand how to look after money are exploited. Too much money is made on the back of those who borrow money at crippling interest rates. I cannot understand why there are not laws to protect them.
Do you use an independent financial adviser?
I would never use any financial adviser. They are salespeople. When you see a broker or a bank manager they have something to sell. They may be doing things in your interest, but their main task is to make money out of you. One of the reasons for the recent banking crisis is that people put too much trust into what they are told by those working in finance this is because they have not been properly educated about personal finance.
Our education system should have personal finance on the school curriculum. It really is not that complicated, but banks and advisers try to make it sound so difficult to understand so they can make money out of us.
Do you invest in stocks and shares?
I have a pension fund I look after myself I buy and sell shares within the fund but not on a daily basis. I do my trading on the internet. I would not give my money to someone else to look after. It is important to stay in control and get to decide how your pension fund is invested. The days when I took a more active interest in markets are far behind me.
What has been your best buy?
I am not that materialistic but one weakness I have which comes from my City days is watches. I own a Rolex not sure what model it is but it is probably worth about £2,000. I bought it in the Nineties in Hong Kong. I don't think I was cheated if it was a hookey watch it would have stopped working by now. It is reliable and keeps great time.
And your worst buy?
Gym membership. I never seem to learn and each year sign up to a gym with great intentions but never seem to use it. The idea that it will make me get fit sucks me in every time. I also have a treadmill but at least that occasionally sees action.
[/b]Has there ever been a point when you were worried about money?[/b]
Every time I asked for money when I was working in Singapore for Barings the cash simply came I didn't perceive that there were any real concerns or that the bank was having any difficulties. You become blinkered. Dealing in large sums does not feel like real cash. I was focused on resolving the problem rather than worrying about the actual money.
Has the recession affected you?
It is strange but I have never been busier. The lessons of the Barings collapse do not seem to have been fully learnt as history has recently been repeating itself. My situation is not just about banking, there is a human interest aspect that strikes a chord with people. I do a lot of after-dinner speaking and conferences and it allows me to travel all over the world. I like to think my story is as relevant now as it has ever been.
Nick Leeson's official website is nickleeson.com