PARIS, France, January 26, SPA — The chief executive of France’s second-largest bank insisted in an interview published Saturday that its actions after discovering a trader had cost it billions in a massive fraud scandal did not fuel turmoil on world markets, according to a report of the Associated Press.
Societe Generale was the target of a police search as investigators moved swiftly to sort out what happened, AP said.
The bank unsettled the already shaky banking sector when it said that 31-year-old Jerome Kerviel had put tens of billions of dollars at risk in one of history’s biggest frauds.
The trader also cost the bank more than $7 billion by making bad stock market bets, Societe Generale said.
The bank said it discovered the fraud last weekend and unwound the trader’s losing bets starting Monday, when world markets tumbled. Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve’s subsequent decision to cut rates.
“It’s absurd!” CEO Daniel Bouton said of the suggestion, in an interview with Le Figaro daily. “Anyone could calculate our contribution to the market in recent days.”