Posted on 01/27/2008 9:18:34 PM PST by TigerLikesRooster
A French Style of Capitalism Is Now Stained
By NELSON D. SCHWARTZ and JAD MOUAWAD
PARIS — In a country where the hurly-burly of market capitalism has long been viewed with suspicion, Société Générale was a rare Gallic success story — the Chanel or Château Margaux of French banking.
The bank pioneered some of the most complex instruments in international finance, earning billions of dollars and the grudging respect of its American and British rivals.
So it was a shock to their national pride when top executives of Société Générale found themselves on the seventh floor of the company’s ultramodern headquarters a week ago Saturday interrogating a 31-year-old trader named Jérôme Kerviel, and discovered just what their innovations had wrought.
Mr. Kerviel acknowledged placing more than $70 billion in secret, unauthorized derivatives trades, according to Société Générale, saddling the bank with a $7.2 billion loss, the biggest ever caused by a rogue trader.
Now the bank, and the broader world of French business, finds itself shamed in the very arena where it had taken pride in being one step ahead of its Anglo-Saxon rivals that dominate financial niches like investment banking and securities underwriting.
Even worse, Mr. Kerviel took advantage of the very technological sophistication French banks are known for to hide his tracks.
(Excerpt) Read more at nytimes.com ...
Ping!
In 1981 France nationalized the banks, in effect kicking the Jews out of the banking business. This is God’s revenge, albeit 27 years late. Better late than never.
Socialists and banking do not mix well.
Ping!
It nice to see French get the comeups LOL!
Eh, eh. American capitalists teach the Socialiste General a thing or two about free enterprise. American bad debt sold to the frogs. Eh, eh.
yitbos
Rusnak made a plea bargain and instead of the 30 years justice demanded, he must serve only 7-1/2 years and must pay back the full amount of the loss after leaving prison. Wonder what will happen to Kerviel? The French don't seem to believe in cause and effect.
Complex instruments? well... they were not buyable and crooked. I remember those Polytech school dudes trying to sell stuff no one could understand. They called it research and development... my boss called it retard and delusional.
The key to financial math is to reduce the gaps and complexity of financial flows, to make them transparent and easy to understand. These guys did the exact opposite, thinking it were genius... while it was autistic and crooked.
Bump.
It’s not isolated to the French. We are all on this leaky lifeboat together.
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