Groupe Caisse d'Epargne, France's third-biggest consumer banking network has ousted its chairman and chief executive officer after suffering a €600 million ($807 million) trading loss.
Charles Milhaud, chairman of the management board, will be replaced by Bernard Comolet, while Alain Lemaire will become CEO, replacing Nicolas Merindol, Caisse d'Epargne said late last night in an e-mailed statement.
The supervisory board of Caisse d'Epargne also accepted the resignation of Julien
Carmona, head of finance, the Paris-based lender said.
"This loss is the consequence at the same time of markets' exceptional volatility, and of the violation of instructions that the board and myself had given," Mr Milhaud (65) said in a separate statement.
"Nevertheless, I take entire responsibility for it," he said, adding that he is asking for no departure compensation.
The bank's proprietary trading team of about six people incurred the loss on equity derivatives after exceeding authorized limits on size and risk, a Paris-based official at customer-owned Caisse d'Epargne said October 17th.
The latest French banking turmoil, said by President Nicolas Sarkozy to show an "absence of responsibility" at the bank, comes about nine months after Societe Generale SA suffered a €4.9 billion loss from unauthorized bets by trader Jerome Kerviel, prompting risk- management questions.
The worst week on record for European stock markets drove Caisse d'Epargne's trading losses.
The Dow Jones Stoxx 600 Index fell 22 per cent in the five days ended October 10th on concern the deepening credit crisis will push the economy into a recession.
A decision of Caisse d'Epargne's management board earlier this year to stop proprietary trading had not been implemented, Milhaud told French newspaper
Le Journal du Dimancheyesterday.
Mr Milhaud said he was informed on October 13th of a deficit of about €100 million, according to JDD.
Bloomberg