IT IS fortunate that Morgan Grenfell has such a wealthy backer, given the financial scale of the disaster which befell its fund management side last year.

Had it occurred in one of the smaller independent fund management houses, it could well have been brought down, which is a sobering thought.

Morgan Grenfell and its parent Deutsche Bank have acted with commendable thoroughness to correct the impact of the affair and investors will be no worse off. It remains extraordinary that Mr Young was able to continue his activities for four months after doubts were raised about the Europe Growth fund at a high level in Morgan Grenfell Asset Management.

Clearly, so long as the performance appeared to be coming through, senior executives were prepared to turn a blind eye and not check that compliance procedures were being followed.

The bloodletting at the top which followed was entirely appropriate. Now the whistleblowers can bypass the top brass altogether and go direct to Deutsche Bank in Frankfurt if necessary.

A raft of recommendations from internal and external sources have been implemented to ensure a similar thing cannot happen again. A list of prescribed shares has been drawn up, and many signatures have to be obtained if a fund manager wants to buy a share not on the list.

There was much talk about pension funds withdrawing their custom from MGAM following the Young affair and the separate noisy departure in January of Nicola Horlick. But this has not occurred to any significant scale. In fact, the company has more under management now that it did before the Young scandal broke.

So MGAM's reputation appears not to have suffered, and it will soon be able to put the affair behind it. Another similar scandal in the industry is unlikely for a time at least, because firms will have double checked their compliance procedures and will be extra vigilant.

The real test will come when the memory of the Young affair fades. Unfortunately, one cannot be confident further scandals will not occur then.