The trader at Société Générale, Jérôme Kerviel, who by manipulation of the Bank's computer system, managed to lose the bank €4.5 billion on unwise gambling, and bring the world's financial system nearly to it's knees, ought to be congratulated. He was sussed on €1.5 billion but his commitments led them to lose another €3 billion before they could put it right. How can they have so much money they dont even notice? The whole scam is exactly equivalent to a bloke down the bookie's managing to take Betfred (and what a stupid name that is), say, for a fortune on the horses by fraud before they latch on. It merely illustrates how so much of the wealth in the world is squandered by gambling (because that is all it is), for the benefit of the already rich allowing banks and others to cream off the wealth. And you can guarantee they don't pay much tax on their profits. And they come squealing to the state for help when they get their fingers burnt, like Northern Wreck. (Oh my lovely partner has one, but not for long). But apparently the state or the banks can't help the poor bastards at Farepak for a few grand.
Why do banks extort such exorbitant charges off you and I for a few quid overdrawn, when they are gambling multiples of these billions every day?
So good for Jerome, for bringing it to everyone's attention. Maybe one day, he will get a new career, like Nick Leeson . Cork sounds like a good city for a frenchman.
3 comments:
Apparently he would make a deal which takes 3 days to go through the SC system, before the 3 days were up, he would replace the deal with another one, leaving the commitment to SC but the original deal out of the system. Good system eh!? The CEO should go!
The point is that banks are *not* normally gambling the money. It should be hedged, so that no matter which way the market moves, the principal is protected.
Kerviel's crime was to fake the hedging; to make all the records show that he was perfectly balanced and had zero exposure to the market risk.
well said, sir!
Post a Comment