French Bank Weathers €7 Billion Subprime Loss From Rogue Trader
Paris–French bank Société Générale said Thursday a rogue trader had lost €7 billion ($10.26 billion) in European stock futures and large U.S. subprime mortgage writedowns, the Financial Times reports.The Paris-headquartered bank was forced into an emergency €5.5 billion share issue as a result. The losses incurred by the trader, 31-year-old Jérome Kerviel, included €2.05 billion…
Paris–French bank Société Générale said Thursday a rogue trader had lost €7 billion ($10.26 billion) in European stock futures and large U.S. subprime mortgage writedowns, the Financial Times reports.The Paris-headquartered bank was forced into an emergency €5.5 billion share issue as a result. The losses incurred by the trader, 31-year-old Jérome Kerviel, included €2.05 billion in writedowns on U.S. mortgage exposure and bond insurers.SocGen had told investors before it had very limited exposure to the subprime problems; now the bank’s risk management procedures have come under fire and a takeover is possible, according to the Times.SocGen will take €1.1 billion of writedowns on its U.S. housing market exposure, in addition to €550 million of losses linked to U.S. bond insurers and €400 million on other unnamed credit market risks.
