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

Friday, April 18, 2008

SocGen CEO quits over rogue trader

The plot thickens at Société Générale, the French bank that got into difficulties over a rogue trader. Daniel Bouton is stepping down as CEO, but moving to a more comfy seat as Chairman. There has been pressure on the top brass at the bank, especially from Nicolas Sarkozy, the French President, but also from investors.

M.Bouton claimed that the bank was hit by this rogue trading scandal all of a sudden. Implying it happened in more or less the same way as Hurrican Katrina or a giant tsunami. You get an early warning of sorts, but it's too late to do much about it in real terms. The Financial Times has been delving into all this. I get the feeling their journalists have picked up more info than they can properly impart. Scheherazade Daneshkhu reporting from Paris writes, "the decision to split Mr Bouton’s role comes only weeks in advance of a crucial report by the board’s crisis committee that one insider suggested to the Financial Times Thursday could have “severe” conclusions." Severe conclusions? Don't tempt us! Find out what they are please.

On the other side of the fence, so to speak, is the trader himself, now suing the bank. Jérôme Kerviel may have some financial facts that sit uneasily with all this. Who knows? The trouble is that banks have been less than transparent and now they are getting themselves into the blame game. A good shake-up is needed with proper (not over) regulation and a requirement that dodgy dealings are a thing of the past.


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