US
Is it coincidence that two out of the four major rogue trading incidents of the past year have occurred at French banks?
First there was SocGen’s €4.9bn hit following an alleged €50bn of futures positions run up by Jérôme Kerviel. And then last week, Caisse d’Epargne suffered a €600m (466.6m) loss on unauthorised equity derivatives trading.
Caisse D’Epargne has been quick to evict its chief exec, chairman and head of finance after six of its equity derivatives prop traders exceeded their risk limits and wrongly bet that stock markets would rise.
Apparently sensing a possible systemic problem, finance minister Christine Lagarde has ordered an emergency audit of all French banks to ensure the same thing doesn’t happen again.
Is she right to be worried? SocGen certainly stands accused of weak procedures, poor implementation and bad management, but are French banks any more susceptible to rogue traders than others?
Or are two French rogues in a row just bad luck?
This is not a French issue. French banks are home to high calibre employees with far greater loyalty to their institution than the average US firm. They’ve had two rogue traders. So what? It’s nothing in the scheme of $700bn writedowns.
French arrogance + French Math skills (investment banks dominated by French math grads) = Guess what
oh, really, Greed would only be a French Quality? Let me laugh !
Who said anything about greed.
sneakyness and arrogance is very present in equity derivs
lol, funny yet quite racist!
French are not different from other world markets. It’s more greed !!!!
Who said anything about sneakiness
Ya…… I know some French exec who messed up in the market by making series of wrong decisions and lost their job finally. They certainly have their own calculations.
French think that with there school they are good in quant, they keep developing model than no one understand and even themselves, where as american keep it simple, they do not have to write one VBA macro 0f 25 pages, but many simple macro that everyone would understand.
Er, HALLO! Lots of people have lost money. Americans, Indians, Brits, Germans, Chinese, Emiratis, you name it. Is this column seriously assuming there is a national trait? Seriously? I mean seriously? Or, is this one of those “Italians have such great fashion flair”things…?
Trading management in the main French bank believe that >90% of people are honest, and will remain honest even in the face of great opportunity and temptation. They will stick to this view even in the face of strong contrary evidence, and do not like to upset ‘rising stars’ by removing the opportunity. Management know, courtesy of French labour laws, they will not be sacked even if a fraud occurs. On balance it is worth the risk of a fraud to avoid the hassle of an angry trader.
Agreed with franglais, however with the taxes so high in France the French have fine tuned the art of tax ev…oidance….
France is a rogue nation. Voila!
Is the author of this article serious? Is this a racist joke?
feefee u are quite clearly a pathetic individual, totally lacking in common sense.
no the article is not “racist” in the slightest.
easily the most ridiculous thing anyone has written on this site for some time. are you Henry in disguise?
Agree with ‘ the market’ : in what possible way is this “racist” ? [it pains me to type this]
Feefee you are a sensationalist fool, no happier than when you’re stirring up trouble. The article is simply trying to provoke some discussion, and has made an interesting point that, of late, a disproportionate number of high-profile “trading irregularity” incidents have emanated from France! And you’re pointing the discrimination finger!
I’m French and I’m wondering if I’m not a rogue trader myself.
But as I’m not a trader, I’m probably just a rogue French.
This article could only be considered as racist if it was referring to afro-French.
Otherwise it is not.
If rogue trading belongs to french banks, bad loans belong to US economy. So the right question would be : Why are there so many rogue loans in USA ? If a french trader make his bank collapse, there’s every chance that rogue loans will make collapse America. Good luck !
There was nothing rogue about the prop trader at CNCE. He took a hit and went to see his superiors who then authorised him to try and cover himself (this led to yet more losses). His superiors did not respect the stop losses that the bank had set. Nothing rogue in all this, just plain bad risk management from a bank that should have never played with derivatives (trust me they have no crack engineers there). But as the article and posts show what the Brits like most is sensationalist articles using fat words like rogue. Such a simplistic view – you’d expect and article like that in the Sun. Facts and intelligent constructive debate exit the room when there is an opportunity to bash the outsider (especially if Gallic). Lucky there hasn’t been a Polish rogue yet.
Why were the managers of the Caisse d’Epargne only dismissed from their fonctions but still work for the company?
Why has the management of the SG never assumed their responsabilities after the Karviel affair and kept their jobs with the same arrogance regardless to the share holders (oh yes they exist) interests?
Always the same “old boys” school mafia?
First of all the article is not racist but rather polemicist. For he (or she) who talked about the Afro-french, please, be advised that the so-called “Afro-french” people when they think, name themselves Kamit-nubians to reminisce their kamitic roots. It’s pretty much like the whites like to be considered caucasian in USA. You can understand the whole point about this question by asking yourself for instance, “In the history of modern finance (network of stok-exchanges connected globally) who are the people who committed the most damaging and impetous rogue trading scandals?” Sure it’s the anglo-saxons! I’ve nothing in particular against them. But we should recognize that these people promoted a compounding liberalized market that now is squeezing the entire world. Now they feel ashamed that their hallowed model is falling apart. Yet they want to blame the dumb french, so that the rest of the world won’t focus on blaming them as the scapegoats of this mess. Maybe the french are still amateur in a sport pratice by the ango-saxons for ages. Please, don’t mistake it. I don’t love the french. God knows how wicked they can be. Look at Africa…
It is not particular to the the French, agreed, however due to a very high tax system (which encourages cash in hand payments), they have fine tuned the art of tax ev…oidance…and loophole excavations
You could add Calyon last year (250m).
The problem with Caisse d’Epargne is not really rogue trading. CE is a retail bank and has nothing to do on financial markets.
They built a small team to play with their money instead of investing it normally as any treasurer would do, they did not put limits on their trader or did not react even when they knew the positions were huge, and they left a single guy bet a big part of the money on a single bet.
This is just a story of another wannabe who failed, excepted that he was given a few billions.
french maths grads are extremely clever… but having worked with them at two french banks find them extremely arrogant and superior to everyone else.
French recruitment system is only based on diploma rather than skills… So you end up with people that should not do what ther’re doing…
And French models are rubbish.. no one really understands them…
This is an easy one to answer in one word “Nepotism”. In France individuals get into schools/uni and as that follows into responsible jobs/roles at French banks etc.. So in essence we have the French equivalents of “Tim but Dim’s” making bets they haven’t got the brain power to understand!!!
These events are known to us because they have been disclosed..how many rogue traders in the UK who lossed considerably more money (except Kerviel off course!) and never were publicly spoken of ?
I think this question is of little relevance…instead, you should ask…why are there so many failed banks in great Britain ?