SocGen braced for fresh criticism

Société Générale is preparing for fresh criticism today after a government report highlighted major failings in its risk controls…

Société Générale is preparing for fresh criticism today after a government report highlighted major failings in its risk controls.

Bank of France governor Christian Noyer is set to address parliament on the trading scandal that has humbled the French bank.

Last week Mr Noyer said he warned France's second largest bank less than a year ago to improve its market control systems

SocGen discovered an alleged fraud last month by one of its traders that led to €4.9 billion of losses at the bank.

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French Economy Minister Christine Lagarde said yesterday the trading debacle highlighted major failings in SocGen's systems She said France would seek stricter risk controls for financial institutions and impose tougher penalties on banks that failed to police them.

As a result of the trading losses, the bank plans a €5.5 billion capital increase that has been underwritten by JP Morgan and Morgan Stanley. Analysts expect SocGen to detail a rights issue later this week.

France's top politicians have expressed their determination to ensure that SocGen avoids falling prey to a hostile takeover bid by a foreign bank