PARIS, Jan 27, 2008 (AFP) – A week from hell when he had to admit that 7.1 billion dollars had gone missing and another 3.5 billion was lost on the US subprime market, has tested even the mettle of crisis veteran Societe Generale chief Daniel Bouton. Societe Generale’s market value has lost more than 40 percent since last May. Many brokerages have put out warnings that it is now seriously at risk.
Many analysts say the bank chairman, who has accused a junior trader of causing the biggest fraudulent loss the finance industry has known, is now again fighting for his job and the future of his bank.
Shareholders have launched legal action demanding compensation, Bouton is expected to be ordered before the French national assembly’s finance commission this week. And all this on top of preparing for a corruption trial to start in February.
A brave Bouton told bank customers in a letter announcing the enormous losses that he was confident Societe Generale could “bounce back” and that he had a “deep sense of optimism” for its future.
One victory came when he offered his resignation to an emergency meeting of the Societe Generale board on Wednesday, four days after the 4.9 billion euros (7.1 billion dollars) of losses blamed on young trader