Friday, January 25, 2008

Rogue trader causes concern on markets

Jerome Kerviel who lost €4.9 billion for Societe Generale

A rogue trader in France has caused concern in European financial markets with some believing he may have contributed to the recent financial turmoil [BBC]. Jerome Kerviel lost at least €4.9 billion [$7.1 bn / £3.7 bn] at the French bank Societe Generale. French President Nicolas Sarkozy called the events at Societe Generale a "large-scale internal fraud", but added that the losses "do not affect the solidity and reliability of the French system". Speaking during a visit to India, he said the turmoil on world markets was more to do with problems in the US and particularly with the so called sub-prime market. But some fear the fraud may leave the bank open to a possible takeover. "Societe Generale will certainly lose its independence after such an operation. We will... have a redefinition of the banking world and France will be no exception," Alain Crouzat at Montsegur Finance told Le Parisien newspaper.
The CAC 40 certainly felt the biggest losses today dropping some 37 points to 4878.1. The Dax and FTSE also saw losses today but not to the extent seen earlier this week. The Dax closed at 6816.7, down 4.33 points, and the FTSE 100 closed 6.8 points down to 5869.0

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