Barings director covered Asia from US

Barings Securities' most senior director in charge of derivatives trading in the Asia region worked from his home in Portland, Oregon, during the key nine-month period leading to the collapse of the merchant bank. Michael Killian, a member of the old Barings Securities' management board,was in charge of futures and options trading for customers in Asia.

Until the summer of 1994 he was based at Barings' Tokyo office, but then returned to Portland.

One of the key weaknesses in Barings' controls questioned by Bank of England investigators is that senior management did not have adequate knowledge of the customer accounts being traded by Nick Leeson in Singapore. Mr Leeson allegedly managed to use this lack of detailed control to create a fictitious customer account, 88888.

He used this to conduct the ruinous derivatives speculation that eventually broke the bank in February under nearly pounds 900m of losses.

Mr Killian still works from Portland as the most senior futures and options broker for the new Barings, owned by the Dutch bank ING. Bank of England investigators appear to have cleared Mr Killian of any responsibility. Mr Leeson's direct boss in the region was Fernando Gueler in Tokyo. In charge of the derivatives arbitrage business that was Mr Leeson's main job, Mr Gueler was among those dismissed by ING.

Investigators are believed to have questioned Barings' managerial wisdom in having the key person overseeing Asian customer derivatives business based in Portland.

Kenneth Clarke, the Chancellor of the Exchequer, said yesterday he hoped to publish the Barings report before Parliament goes into recess on 21 July.