Buckingham Palace sources kept mum about these new woes last week. “Anything to do with the queen’s private money is a matter for her,” said a spokeswoman. “Taxpayers’ money isn’t involved.” But the British monarch had more than a nodding interest in how the Barings saga ends. The firm’s asset-management arm apparently controlled the bulk of her liquid assets of close to $100 million. Most of that equity is believed to be invested in stocks and bonds and “ring-fenced” from exposure to the actions of traders like Leeson. But asset managers probably kept at least 5 percent of the queen’s funds in cash–in other words, up to $5 million. When the Bank of England failed to rescue Barings from bankruptcy last week, that money suddenly turned as frozen as one of Diana’s smiles for her estranged husband, Charles. Interest payments on the queen’s $5 million stopped last week and won’t be restored retroactively. Up to one third of the principal will be lost unless someone purchases Barings in one piece. The ING Group, a Dutch banking and insurance concern, was negotiating late last week to buy Barings for a reported sale price of $1.60 and to assume its massive debt.
other royal money stands at risk as liquidators pursue a solution. Among them: a $1.5 million current account that supports the Prince’s Trust, a charity Charles set up to help economically deprived teenagers, and unknown holdings of Princess Anne and the Duke and Duchess of Kent. If Barings had gone under during the bank’s 19th century glory years, the list of victims might have included the imperial Russian government, Emperor Napoleon III of France and Americans James Monroe and Nathaniel Hawthorne. But in the 20th century, Barings’s blue-chip pre-eminence began to wane. For some clients, the sun set on one mainstay of Britain’s mercantile empire just in time to get their money back.
