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The collapse of Barings Bank Mr. Lesson was accused of losing 1.3 billon dollars as a result of a risky derivative investment with the potential of a 27-billon gain. The collapse of Barings Bank in 1995 has been one of the most spectacular events in the banking world in recent years. Banks solvency and liquidity can be significantly threatened if speculative trading in financial derivatives is guided by a lack of adequate internal and external controls. There is evidence that such reasons are responsible for the failure of Barings in February 1995. Offering stock options to employees Recently, many multi-national companies, such as Cisco and Yahoo, stimulate the employees morale by offering stock options to their employees. Stock option provides a chance for employees to become the shareholders of the company. As the result, the interest and profit of the company is tightly connected with the employees interest and income. PRP contracts Many firms adopt Profit-Related-Pay contracts and pay wages at levels that vary with firms profits. Many studies suggest that firms adopting PRP contracts show productivity per worker higher than that of their competitors who used more traditional contracts. The reason behind is that PRP contracts greatly change individual workers relationships to the firm, connecting their interest with firms interest. The need for communication and coordination | 
