Bank of France governor slams SocGen's controls
Recommendations for improving controls did not address products used by the rogue trader's activities which resulted in £3.9bn loss
The governor of the Bank of France has slammed distressed Société Générale
for internal controls that failed to work.
”None of the controls within Société Générale seem to have worked as they
should have,’ governor Christian Noyer told a panel of the French Senate’s
finance committee yesterday.
‘Those (controls) that did work were not subject to the appropriate
follow-up,’ he added.
The bank had undergone 17 checks between 2006 and 2007, which led to
‘general’ recommendations to reinforce controls.
Although the recommendations suggested more human and technical resources for
monitoring markets risks, the types of products involved in the alleged fraud
revealed last week were never addressed,
Forbes
reported.
Noyer also told the committee that he gave his approval for the bank to
unwind the unauthorized positions of the rogue trader on January 20, after it
discovered the positions on January 18.
He said the unwinding aimed to ensure ‘financial stability’ and to ‘protect
customers’.
Further reading:
Independent auditors to investigate SocGen
Société
Générale opens inquiry into rogue trader