DAY by day the French have been watching the unfolding saga at Société Générale with a mix of horror and intrigue. This week has brought several twists to the tale of how a single trader,
Jerome Kerviel, whose desk was only authorised to take positions of up to €125m ($183m), could have lost the bank €4.9 billion. Each leaves managers at the French bank looking even more negligent.
Mr Kerviel himself spoke out for the first time this week. He said that he was operating alone, admitted to having made fictitious entries to cover his tracks, and argued, with sublime understatement, that he “got carried away”. Although he acknowledged his part of the blame, he said that he was being made a “scapegoat” by the bank. Reports in the French press depict a young trader, from a small town in Brittany, keen to prove himself in a trading room dominated by members of France’s educational elite.
According to testimony to the financial police, leaked to
Le Monde, Mr Kerviel said that the techniques he used to cover his tracks “are not sophisticated at all”, and that he was convinced
his superiors knew what he was up to, as he had received “several questioning emails” in 2007. By the end of that year, Mr Kerviel’s unauthorised positions were €1.4 billion in profit; it was only in 2008 that his trades turned negative. “As long as we earn and it doesn’t show too much,” he said, “nobody says anything.”
