French savings bank Caisse d’Epargne has revealed a 600 million euros loss from trading share derivatives. It blamed the extreme volatility of the markets last week.
However the bank said the investment team involved had exceeded their trading limits in terms of size and risk.
The bank workers’ union is appalled. Bruno Aguirre of Force Ouvrière said: “It is not really surprising this happens when they play the markets, it’s not our speciality nor that of the bosses of these kind of banks, so it means they’ll go off course.”
The Finance Ministry has asked the French banking commission to carry out a special audit into all of the country’s banks to make sure they are following the rules.
This comes nine months after Societe Generale, reported a loss of nearly five billion euros because of a series of unauthorized bad investments by Jerome Kerviel, who the bank said was a “rogue trader.”
Rumours of a big derivatives loss by a major French bank spooked the Paris stock market last week.