Société Générale Turmoil
After revelations into huge losses due to a traders un-hedged market positions last week, Société Générale has faced further pressure this week.
French investigators claimed that the Eurex derivatives exchange raised the alarm last year on dubious trading at Société Générale last year.
The bank faces lengthy investigations into losses of $7.2bn carried out by a rogue trader at the firm. There is much speculation surrounding a buyout of the bank by one of the other large French banks, namely BNP Paribas or Crédit Agricole.
It’s claimed that Eurex became concerned at positions taken by a junior trader at Société Génerale as early as far back as November 2007.
With such large losses a forced takeover bid is looking ever-more likely. The two businesses (retail banking and investment banking) arms of the business could be split and sold separately.
BNP Paribas is the obvious candidate to buy the retail arm of the business. With Crédit Agricole taking control of the investment arm, due to an already large market share in French retail banking.
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