Incredulity as bank fraud unfurls

[frigidmagi]

BBC

The rumours had been swelling in France for several days - something was wrong with Societe Generale's accounts.

But when the news was confirmed, the staggering size of the losses took a while to sink in.

There was little to indicate that this was potentially one of the biggest ever financial scandals.

A major rolling news radio station ran the story throughout the morning as its second item.

French newspaper websites did likewise. The mystery of the alleged fraudster could wait - France had a major new sporting hero on its hands, as Jo-Wilfried Tsonga defied the odds to reach the final of the Australian Open.

'Go down with the ship'

But on one of those paper's websites, by early afternoon there were 40 times more reactions from readers to events at Societe Generale than there were heralding the young tennis star's achievement.


I've been a client for 28 years - I will not change banks - I don't have a lot of money so I'm not that concerned
Elvira,
Societe Generale customer

"Stop taking us for idiots", wrote one, incredulous that a lone trader could "lose" five billion euros without anyone knowing.

Several were angry that Societe Generale's bosses had not resigned.

The captain used to go down with his ship, said another, "yet today the head of a bank responsible for colossal losses remains in place... Poor France!"

The scandal has caused shockwaves in the banking world but ordinary people seem to be taking the news in their stride.

Customers outside one branch of Societe Generale in central Paris did not believe the scandal would affect them personally.

One woman, Elvira, 64, said: "I've been a client for 28 years. I will not change banks. I don't have a lot of money so I'm not that concerned."

'No accomplices'

Another customer, Jean, 26 years old, said he was more concerned by the fallout from the US subprime crisis.

"I can't see how one single trader can pull this off, there are supposed to be different security levels. It is worrying that this can happen. But I didn't lose confidence as I didn't have any confidence before," he said.

Financial experts in France have also asked how Jerome Kerviel could, as he is alleged to have done, bypass the bank's security systems designed to prevent such disasters from happening.

France's Finance Minister Christine Lagarde has asked the country's Banking Commission to propose new controls to prevent fraud-related losses.

Questions have been raised over whether the trader was really acting alone, as the bank has claimed.

But one man who has questioned Jerome Kerviel remains convinced that was the case.

Jean-Pierre Mustier, the head of Societe Generale's investment bank, SGCIB, said: "Bearing in mind the methods used, it seems impossible that he acted with accomplices."