French bank Société Générale faced tough questions this morning over how it failed to spot the biggest dealing scandal in history in which a lone trader triggered a €4.9 billion ($7bn) loss.
The shaken bank organised a €5.5 billion ($8.06bn) capital increase backed by its rivals, but analysts and newspapers questioned how long France's second-largest bank would remain independent.
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| A man, whom French media are identifying as Societe Generale employee Jerome Kerviel who is alleged to be at the heart of an alleged €4.9 billion trading fraud. |
In full page adverts in France's leading newspapers, Chairman Daniel Bouton apologised to Société Générale shareholders as some newspapers questioned whether a stay of execution granted him by the bank's board would last long.
"I understand perfectly your disappointment and see your anger. This situation is completely unacceptable," Mr Bouton wrote. "I ask you to accept my apologies and my profound regrets."
Global investors largely shrugged off the scandal, however. Asian stocks surged in the wake of a higher close on Wall Street after President Bush and Congressional leaders agreed on an economic stimulus package to stave off a recession.
French newspapers made for uncomfortable reading, however,
for SocGen executives aiming to repair the bank's reputation as home to some of the world's most complex rocket-science finance.
A SocGen spokesman said from Beijing that managers were explaining the situation to their teams, while the bank was also communicating with its clients.