Wednesday, March 14, 2012

French finance minister says Societe Generale followed rules in handling trading losses

French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were not heeded before the banking giant announced massive losses attributed to a rogue trader.

Lagarde, who submitted a report on the case to the French prime minister Monday, said the bank followed market rules in unwinding the trader's transactions. But she also urged greater controls on banks in France and worldwide.

In a bombshell announcement Jan. 24, Societe Generale said that it had lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel.

The bank says Kerviel overstepped his …

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