The Governor, speaking at the Chartered Institute of Bankers' conference in London, said similar positions could have been built up in any of the financial markets.
Mr George said that the first line of defence had to be the banks themselves with self-regulation of risk management. There should be extensive internal and external audits.
He said there were three other layers of defence: local regulation, UK securities regulation and Bank of England system regulation. The investigation into the Barings collapse should ask why all these controls failed to prevent the downfall, he added.
The Governor said that he expected the Board of Banking Supervision to produce its report on the collapse of Barings in two stages.The first, which he hoped would be ready in a couple of months, would establish the facts behind the collapse.
"So far as possible we will make these facts public," he said. A second report, which could take three months longer, would examine the regulatory lessons.
In a separate announcement yesterday, Barings' rescuer, the Dutch bank Internationale Nederlanden Groep (ING), said that Barings had suffered less than originally feared and should be back to normal soon.
Aad Jacobs, ING's chairman, said: "Things at Barings Asset Management are going better than we thought at first. Very few clients have left and no key staff have gone. Barings' brokerage business is almost back to normal."
Mr Jacobs dismissed suggestions that ING's earnings would be more volatile following the acquisition of the merchant bank: "A key earnings element at Barings is asset management and that is very stable. So we don't think that the volatility of ING's earnings will change as a result of Barings."
Mr Jacobs said losses at Barings would be "a little bit less" than ING had identified on 5 March and there was now almost no chance of unexpected losses.
"We can now say with much more confidence than before that . . . the chance of finding a skeleton in the cupboard is very remote."
He repeated an earlier forecast that its £660m acquisition would be neutral for ING's profits in 1995 and positive thereafter. ING's 1994 profits rose by 13.3 per cent to 2.3bn guilders (£1.05bn) against 2.03bn (£800m) in 1993, the group said yesterday.Reuse content