Fall out from rogue trader will be limited
The impact of a rogue trader’s €5bn fraud at French bank Societe Generale will be limited, according to David Moss, director of European equities at F&C.
Yesterday it emerged that trader Jérôme Kerviel has been held accountable for a €5 billion (£3.7 billion) fraud at Société Générale, France’s second largest bank.
“What we are witnessing here seems to be one bank’s failure to have adequate individual controls in place,” he said. While the large financial loss to the bank will undoubtedly cause investors to be nervous about other banks with large trading operations, Moss has said that he doesn’t expect the development to have a significant impact on the banking sector’s valuations.
He added: “If we look at the example of Allied Irish, who suffered a large trading loss in its US operations some years ago, this had little impact on other banks valuations at the time.”