Nick Durlacher, chairman of the SFA, in a letter to the Treasury committee to which he gave evidence yesterday, said: "We will shortly be participating with the CFTC in war games to test our mutual preparedness for another regulatory emergency."
The "war games" will involve hypothetical tests, such as how quickly each regulator can get vital information about a company and how quickly they can work together to put together a rescue plan. "It's a simulation exercise rather like fire brigade practice," Richard Farrant, chief executive of the SFA, told the committee.
Mr Durlacher said in his letter: "Our day-to-day working relationship is often closer with US regulators than with a number of European and Far East regulators.
"It was a request for information from the SEC [a US regulator] about trading in Solv-Ex, a company quoted on Nasdaq, which alerted us to possible connections with Morgan Grenfell Asset Management."
The committee asked the SFA to search its records for the names of Baring executives who knew that Nick Leeson, the trader who brought down Barings, had been turned down for SFA membership because of outstanding loans. Leeson is now serving a jail sentence in Singapore.
The Barings crisis last year raised the issue of international co-operation between regulators as the problems which caused the collapse took place in Singapore, and not London.Reuse content