France defends rogue trader bank
The French government will back troubled bank Societe Generale against any attempted takeovers while it remains weakened by the rogue trader scandal, Prime Minister Francois Fillon said today.
“The government will not let Societe Generale become the object of hostile raids from other banks,” Mr Fillon said, adding that it was also guarding against any attempt to destabilise France’s second-largest bank.
He indicated that new banking regulations might be needed – after investigators have pinpointed exactly how Societe Generale’s controls failed allowing trader Jerome Kerviel to lose €4.7bn in share gambles.
Kerviel was formally put on preliminary charges of breach of trust, forgery and unauthorised computer activity, yesterday and released on bail in spite of objections from prosecuting lawyers.
Today prosecutors lodged an appeal against the decision to free Kerviel.
Societe Generale is fending off mounting questions about how it handled what the massive fraud blamed on the 31-year-old futures trader.
Analysts say the bank is vulnerable to a takeover, speculation that the French government is doing its best to downplay.
The bank and prosecutors have said Kerviel does not appear to have profited from his unauthorised dealings, and his lawyers described him as a “modest boy” who got in over his head.
Prosecutors, based on Kerviel’s account to investigators, confirmed Societe Generale’s claims that the trader used other people’s computer access codes, falsified documents and used other methods to cover his tracks – helped by his previous experience in other offices at the bank that monitor traders.
The bank says he bet around €33bn on European markets.
