If the failure of BCCI is generally a dispiriting one for SMCR enthusiasts, the collapse of Barings Bank, four years later, is a lot more promising. This story is all about individual accountability, mainly at the bank itself but also at the Bank of England.

A brief recap: Barings collapsed in February 1995 and was sold to ING for £1. The direct cause was the activities of Nick Leeson, working in Barings Singapore, who used futures and options contracts to take high levels of risk. But behind the scenes were some broader factors, including Barings' drive to expand in Asia, the need for increased profits to preserve the banks' independence, and the passing of a culture of informal controls that proved inadequate for a bank with global ambitions.

Without going into detail, the failure was caused by Leeson’s unauthorised trading activities going unnoticed by both management and supervisors. The reasons why this happened are complex but, in the main, stem from a combination of avoidable misunderstandings between Barings and the Bank of England, inadequate controls within Barings, and failure of the Bank of England to fully recognise or understand the risks involved in Barings’ changing business model.

SMCR would have helped with all three of these problems, and may have avoided the first two entirely.

The relevant report on the bank’s failure, again produced with admirable speed, was conducted by the Board of Banking Supervision. It found that management failed: to institute a proper system of internal controls; to enforce accountability for all profits, risks and operations; and adequately to follow up on a number of warning signals over a prolonged period. Neither the external auditors nor the regulators discovered Leeson’s activities.

The circumstances of Barings seem completely in SMCR territory, and the regime might well have prevented Barings’ failure had it been in place. This conclusion does, however, depend on the underlying purpose of SMCR being embraced by both firm and regulators, not treated by either as simply more regulation to comply with, no more or less.

Stepping back a little, however, there are some cracks in this logic, perhaps not wide enough to invalidate it but sufficiently critical to raise a warning about the ability of SMCR to deal with problems related to culture and accountability across the board in the way that is sometimes implied. Here are three of the most significant:

1. Barings was not a large bank, and today it might attract less regulatory resource than it did in the 1990s. This arguably makes it less likely SMCR would have been properly implemented, or that the regulators would either spot or act on any shortcomings.

2. Part of the problem was the inability of both Barings’ management and the regulators to see the whole picture. This arguably hasn’t changed much. Twin peaks regulation, where responsibility is split between the PRA and FCA, doesn’t help, and neither does the divergent supervisory approaches of the two regulators.

3. The pressures of globalisation and industry consolidation, to which Barings was trying to respond, are as strong now as they were then. Barings’ intra-group relationships with Barings Singapore Ltd and Barings Futures Singapore were complex, but the 2018 equivalents would almost certainly be more so. The ability of SMCR to cope effectively with this complexity remains largely unproven.

SMCR might have prevented the collapse of Barings, and should certainly have lessened its impact. But the more the new regime is seen as a silver bullet for all issues around accountability, the less effective it is likely to be.