Société Générale 'doing just fine'

SOCIETE Générale chairman Daniel Bouton told a parliament committee hearing last week that the French bank was "doing just fine" despite a rogue-trading scandal that led to losses of billions of euros.

Daniel Bouton, who offered twice to resign over the scandal, told a parliamentary commission the bank had not suffered any loss of market confidence despite the huge losses, attributed to alleged unauthorised activity by junior trader Jerome Kerviel.

Kerviel is under investigation for alleged unauthorised trading and falsifying documents, accusations which he contests.

Bouton told the finance committee: "The fraud, which had very important consequences, did not call into question our system of risk-assessment because it involved positions that were completely hidden.

"This is why Société Générale is doing just fine today, including in our market activities, in the sense that we are dealing with the effects of the crisis.

“There has not been the slightest loss of confidence from hundreds of financial dealers who work and deal with us.”

Société Générale revealed in January that it had incurred the losses after unwinding positions which exposed it potentially to liabilities of about 50 billion euros, in excess of shareholders' funds.

The bank said that these positions had been taken in breach of internal rules.

It closed the positions in three days of secret trading, with the approval of the Bank of France, has raised new capital, and for a while was a hot subject of takeover talk which has now subsided.

Kerviel, 31, is under investigation for alleged beach of trust, fabricating documents and illegally accessing bank computers.

A special committee appointed by Société Générale itself has exposed failures in the bank's internal controls.