Rogue Traders: Made in China

I came across two (rather old) stories about rogue traders in China:

• China Aviation Oil's $500 million fiasco in Oil future trading in 2004; and
• Chinese State Reserve Bureau's infamous trader, Liu Qibing's, more than $200 million loss in copper market in 2005.

The interesting thing about these financial disasters is how they resemble the rogue trader at Barrings Bank decades ago:

• Arbitrage trader starts to take massive unauthorized positions.
• One man effectively in control of both front office (trading) and mid-office (risk management).
• The use of false account to hide losses

It seems Chinese Government Agencies and SOEs still have a long way to go in properly managing their operational as well as market risks.