Business | Banking
Fraud: Bank chief delayed informing French government
Christian Noyer, Bank of France chief, postponed informing the government about the scam at the Societe Generale so as to avoid leaks while the bank unwound the positions set up by rogue dealer Jerome Kerivel.
- Agencies
- Published: 20:19 January 28, 2008
Paris: Christian Noyer, Bank of France chief, postponed informing the government about the scam at the Societe Generale so as to avoid leaks while the bank unwound the positions set up by rogue dealer Jerome Kerivel.
The bank chief learnt about the problems on Sunday afternoon (January 20) and made a "difficult" decision by not informing the government till next Wednesday.
In an BFM radio interview on Monday, he said: "I considered that the huge size of the position meant that any risk of an involuntary leak, involuntary of course - should be removed because that was the major risk that could happen in the first hours,".
Given the sclae of the fraud, the government "could have been informed earlier", said Prime Minister Francois Fillon.
President Nicolas Sarkozy was angered by Noyer's delay in informing thegovernment.
The dealer, Jerome Kerviel was a junior banking trader who set up positions costing $73 billion), making bets on European stock market indexes, as he was not authorised to such positions and admitting documents forgery.
Meanwhile, a Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against Kerviel.
The prosecutor, Jean-Claude Marin, also for the first time gave an inkling of what motivated the low-level trader. He said the 31-year-old did not seek personal profit and had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
"It's always a bit for money, I'm not sure that was his
prime motive," said the prosecutor. "It functions a bit
like a drug, it's an addiction ... there's a sort of spiral
you can't get out of."
Marin was speaking as police wrapped up nearly 48 hours of questioning Kerviel. The trader was to appear before a judge who would decide whether to proceed with preliminary charges.
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