Nick Leeson, the trader whose wrong- way bets on Japanese stocks ruined Barings Plc, is joining a mediation firm to advise Irish borrowers looking to renegotiate debts in the wake of the real estate collapse.
Leeson, 46, who has lived in Ireland for more than 10 years, will join GDP Partnership as a principal as it expands into Dublin, the company said in a statement posted on Twitter by Leeson. There is “a lot of fear and stress currently in the country with debt the root of the problem,” it said.
“There might be wry smiles from people when they think of me walking back into a bank to try to negotiate on their behalf,” Leeson told Dublin-based broadcaster RTE Radio today. “I have had to face into adversity both financial, health and many other different aspects of it, so there is a certain degree of empathy with what people are facing. It is daunting.”
Ireland is grappling with the fallout from the worst real estate bust in Western Europe, with 25 percent of all mortgages restructured or in arrears. While the banks aren’t necessarily the “baddies,” the housing bubble crash is largely a result of their “reckless lending,” Leeson said.
“There are a lot of individuals out there, a lot of borrowers who have got their heads firmly in the sand, who aren’t talking to anybody,” Leeson told RTE. “They aren’t telling the wife about what is going on, the bank phones up, the wife says it’s the bank, ‘I’m not here, I don’t want to talk to them,’ it’s about re-engaging.”
Leeson, who has overcome cancer, amassed losses of $1.4 billion as Barings Plc’s former head trader in Singapore in 1995. The London-based bank collapsed and its assets were sold to ING Groep NV (INGA) of the Netherlands for 1 pound ($1.53). Barings, whose clients included Queen Elizabeth II, had financed Britain’s campaign against Napoleon Bonaparte from 1804 to 1815.
In Ireland, the focus of repossessions is on the so-called buy-to-let market, or properties bought to rent, which jumped during a decade-long real estate boom, and now account for more than a fifth of the 142 billion-euro ($185 billion) mortgage market. More than a quarter of the 31.1 billion euros of loans on those properties was more than three months in arrears at the end of December, the Irish Central Bank said last month.
GDP said in the statement that Leeson will join Conor Devine, a chartered surveyor, and James Gibbons. The company isn’t a “charitable organization” and borrowers will have to pay a small up-front charge in addition to a success fee, Devine told RTE in the same interview.
Leeson, who still has an injunction of 100 million pounds against him from the failure of Barings, told RTE that it’s “not money I owe.”
“It was an injunction that was there for controlling purposes,” he said. “It was to make sure that I engaged with the liquidators at that time. It’s never been really enforced.”
Leeson lives in Ireland with second wife, Leona, and three children, according to his website. He stepped down as chief executive officer of football club Galway United in early 2011 after being appointed in 2006.
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