Speaking at the CGMA European conference in London yesterday, Leeson said despite the Barings collapse and other financial scandals since then, lessons have not been learnt and banking standards have not improved.
Leeson's unauthorised trading led to the collapse of Barings bank in the early 90's, after he ran up losses of £827 million over a three-year period.
He said despite all the warnings the industry has had recently, such as Lehman Brothers and Northern Rock, change in the banking sector will not happen.
"Do I see banking reform happening? No," said Leeson. "The industry is always too reactive and constantly behind the curve. Banks are so powerful that regulations always get watered down and by the time something's gets to statute it's pointless, as it's either been modified or too late to have any real effect."
He also called the Financial Services Authority (FSA) a "cumbersome, unwieldy division" that has recently proved it doesn't perform well in financial crashes.
Leeson said the fact that the Barings scandal has now dropped to 14 on the list of the biggest financial losses proves the banking industry hasn't changed much since he was working in it.
Star performer
Barings Bank was the oldest merchant bank in London when it collapsed in 1995 after Leeson lost £827 million over a three-year period due to speculative investing, primarily in futures contracts, at the bank's Singapore office.
Leeson was one of the bank's 'star performers' and helped Barings to post record profits in the early 90s, however in 1994 Asian markets began to turn against him, accelerated by the impact of an earthquake in Kobe, Japan.
By the end of 1994, losses stood at £208 million as Leeson attempted to trade himself out of trouble. "I once lost £200 million in one day," Leeson admitted yesterday.
He blamed the lack of compliance and checks, which enabled him to gamble large amounts of money unchecked. "It was relatively easy to hide it, I'm a believer that with any financial scandal the information is all there to expose it, if you just look in the right places."
Disregard for ethics
Leeson said people thought he had a "blatant disregard" for ethics, but he said that wasn't true.
"I knew what I was doing but I was trying to buy time to make the money back, but in the end I was running from my own failure. When I came across a situation I couldn't cope with I froze, I should've done the right thing and acted ethically."
The beginning of the end occurred in January 1995 when Leeson placed a short straddle bet in the Singapore market and Tokyo stock exchanges, essentially betting that the Japanese stock market would not move significantly overnight. However Kobe hit, which left markets spiraling downwards.
Leeson fled the country leaving Barings with a deficit almost as large as the banks entire assets. The bank subsequently collapsed and Leeson was soon found and arrested.
He pleaded guilty to fraud and was sentenced to six-and-a-half years in prison.
Dozens of executives who were implicated in the failure to control Leeson resigned or were sacked.
Leeson said he hoped his story will make companies think about risk and corporate responsibility.
