Trying times for Societe Generale’s bosses, as their report into the Kerviel scandal is into its second draft and still satisfies no-one. And shareholders, who have seen the venerable bank make record losses, halving in value since last June, at last had their say on Tuesday, at the annual general meeting.
Daniel Bouton, bank president, has been shunted upstairs and the new boss Frederick Oudea has much explaining to do. Subprime losses in America are worth over three billion euros, but it is the near five billion burned by rogue trader Jerome Kerviel that has made the biggest hole.
Kerviel’s lawyer says branding his client, and now a junior, as criminals, will not do. There is more to this case than that: “Jerome always stated that he acted alone but that everybody around him was aware at least in principle of what he was doing. Now on that basis we find it strange that SocGen would choose to put the incompetence word on the superiors, and on the other hand to make a new scapegoat, saying that the new 23 year-old assistant is a criminal, because that is what they are saying”.
The suspicion is senior managers were blinded by fat profits, and as traditional bankers were slow to seize the potential downside of investment banking.