Jérôme Kerviel, a 31-year-old Paris-based trader working on the bank’s European equities derivatives desk, was already being portrayed by the governor of the Banque de France on Thursday as a “genius of fraud”.

The FT reports that Kerviel risked billions of euros on equity derivatives – in effect betting on future movements in European stock markets – and created elaborate fictitious hedging positions to cover his tracks in a covert scheme.

The scandal – incorporating a fraud significantly bigger than the $1.4bn deception that brought down Barings Bank in 1995 – has shocked the French establishment, which moved quickly to avert a crisis of confidence.  But this loss does open the bank up to the threat of takeover… with the share price having fallen nearly 50% in the past six months .

I wonder how ”open” the French are to having Soc Gen owned by the Chinese or other sovereign fund…? 

In the banking industry “One person’s fraudulent loss is presumably another’s innocent gain.” as there is always a counterpart to these deals…

Andrew Hill writes in the FT

UK regulators, politicians and bankers, with fingers firmly crossed, must be murmuring: “Thank God he’s not British.”

As the last thing that the battered Labour government needs right now is “yet another crisis.”