A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Friday, January 25, 2008

Rogue trader scandal is embarassment to banks

The rogue trader at the centre of this French banking scandal has gone into hiding but apparently is prepared to talk to the police. The two are not mutually supportive, so he either comes out of hiding and talks, or stays put. However, if I was the boss of the bank, I'd be a bit worried about what the police might pick up. The bank in question, Societe Generale, has filed a legal complaint against the trader, 31-year-old Frenchman Jerome Kerviel accusing him of defrauding the bank, which led to a loss of 4.9bn euros ($7.1bn; £3.7bn). The chairman Daniel Bouton said the fraud was a "one-off" and went on to deny it was a trading or risk-management fault. Does he think we will buy this? In any event, Kerviel is reported as having gained nothing or wanting to gain anything from such an escapade. And would M. Bouton be so upset if the "risks" had panned out? Would he hell!

How come a wizz-kid type broker, who had the ability to breach "security", got away with it for so long. Did no other person in the bank have the proper authorisation? "Mon dieu!" they cried, as their eyes saw this gargantuan amount of cash being moved back and forth. No chats along the Seine, his co-workers itching to know if he was going to be Broker of the Year?

Come off it M. Bouton! Nick Leeson, that other well-known money mover, said that such a feat could not be done as a "one-off". It's all corporate rank-closing. Daniel Bouton comes across as a well-filled suit who has done well out of such characters as Kerviel.

What is needed now is no Inspector Clouseau, more an Inspector Maigret!


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