Don't miss

Replay


LATEST SHOWS

IN THE PAPERS

Ruling Socialists 'fear historic defeat' in upcoming elections

Read more

IN THE PAPERS

'What black man holds job four years'

Read more

DEBATE

Soft on smacking? France slammed for not banning corporal punishment (part 2)

Read more

DEBATE

Soft on smacking? France slammed for not banning corporal punishment (part 1)

Read more

MEDIAWATCH

To smack or not to smack?

Read more

FOCUS

French Muslims refuse to be scapegoats for extremists

Read more

IN THE PAPERS

'Obama needs to provide real answers to Netanyahu's arguments'

Read more

IN THE PAPERS

Hollande: 'We have to tear voters away from the National Front'

Read more

FACE-OFF

French local elections: Far-right National Front in pole position

Read more

Caisse d'Epargne losses lead to trader arrest

Text by AFP

Latest update : 2008-10-31

An investigation continues following the arrest in France of a Caisse d'Epargne trader suspected of losing more than 750 million euros in unauthorised derivatives trading.

A French judge has opened an investigation into a possible breach of trust by a dealer suspected of losing a bank more than 750 million euros in unauthorised trading in derivatives, judicial officials said Thursday.
   
The dealer, 33-year-old Boris Picano-Nacci, has been in police custody since Wednesday morning and was transferred on Thursday evening to the headquarters of the division dealing with financial crimes after 36 hours of questioning.
   
He was banned from leaving the country or having any contact with former colleagues.
   
He was taken into custody as part of a preliminary investigation that seeks to determine whether anyone is criminally liable for the massive losses, racked up at the height of the global financial crisis, by the Caisse d'Epargne bank.
   
The bank announced losses of 600 million euros on October 17 and has revised the figure upwards several times. It now puts its losses at 751 million euros.
   
The traders reportedly exceeded limits set on the amount of funds that could be risked at any one time in market plays.
   
According to an internal report seen by AFP, the trader ignored instructions given in April to gradually unwind his market positions.
   
"Instead, from September 15... he appears to have engaged in a risky strategy, acting upon his own initiative and for major sums," the report said.
   
"This strategy was renewed several times throughout the month and in October, including for extraordinarily high amounts," but went undetected due to "deficiencies" in the control system at Caisse d'Epargne, it said.
   
Finance Minister Christine Lagarde, furious the case undermined bids to restore confidence in France's financial sector, said a banking commission inquiry found "serious deficiencies" in the bank's controls.
   
The scandal revived memories of the disaster at another French bank, Societe Generale, which lost 4.9 billion euros in unauthorised deals allegedly made by a junior trader Jerome Kerviel.
   
The French government has insisted the country's major banks are all stable despite the international credit crunch and have in any case promised state aid to bail out any failing institution and protect depositors.
   
News of the loss came in the same week as directors of Caisse d'Epargne approved plans to open merger talks with Banque Populaire to form France's second-largest retail bank.
   
Caisse d'Epargne has 27 million account holders -- nearly half of all savers in France --- and employs 51,500 people.

Date created : 2008-10-31

COMMENT(S)