A "large New York based financial institution" yesterday became the first bank to buy SVB's "rogue trader" policy, and the syndicate expects more banks to follow suit in the coming months.
"There's been a tremendous interest", said Rupert Villers of SVB, who reckons the syndicate has made about 30 quotes since the policy's inception last October. SVB has handled queries from banks in Japan, Switzerland, the USA, Scandinavia, Holland and the UK.
But be warned, the cost of protecting your bank from a rogue trader is far from negligible. A bank wanting to insure itself against losses of $300m (pounds 190m) would be looking an annual premium of several million dollars, depending on SVB's assessment of its management controls, according to Mr Villers.
SVB said its policy, which was inspired by the antics of Mr Leeson, "provides cover for a loss sustained by a bank as a result of trading which has been concealed by the trader or falsely recorded in the institution's records. The cover extends to commitments in excess of permitted limits, trading in unauthorised instruments and trading with unapproved counterparties".
But although SVB insures against dishonesty, it does not cover incompetence.
Mr Villers said yesterday he expected further sales of the policy this month: "The new product has been targeted at quality institutions with a sound internal control environment.''