Owing to the extreme volatility of the financial markets and the stock market crash in the week of October 6, Groupe Caisse d’Epargne has suffered a major market incident in its equity derivatives activity, resulting in a loss of approximately E600 million. This incident was revealed within the framework of routine control procedures.
This loss is exclusively related to the proprietary trading activities pursued by CNCE, i.e., activities independent of its treasury department.
In view of the size of its capital base – more than E20 billion – and it substantial liquidity, this loss has no effect on the financial strength of the Group and will have no impact on its customers.
Necessary measures were taken immediately to close this position and discontinue this activity. Disciplinary action has been taken and the supervisory authorities have been informed.
The FT has more:
The loss occurred in the bank’s proprietary trading division which is in the process of being closed down following a decision taken in June.
Instructions were issued to team heads to limit exposures but the team of four to five traders allegedly exceeded their limits and were caught out by last week’s stock market crash.
It is understood that some of the individuals concerned have been fired and others moved to different positions.
Caisse d’Epargne said it made the discovery following the start of its merger talks with Banque Populaire.
600 mio losses now, plus the ones of Natixis…its gonna be a quite interesting amount…
why DUMBEST? Because they are NOT stuffed with Harvard/Sorbonne/Yale Skull N Bones Brahmins?
John Thain is smart, He’s still got his job. AND ALL THE TOXIC JUNK is now Bank of America’s problem!
the Bernanke shotgun-merger means BoA gets to sell the toxic junk freely inherited! Thus saving Thain’s gambling Machine.
Long Live the Brahmins of Finance. Such Eminence! Such Stochastic Calculus!
One word :
LOL