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French bank admits trading loss | French bank admits trading loss |
(about 7 hours later) | |
French Finance Minister Christine Lagarde has called for a special audit of all French banks after Caisse d'Epargne admitted a big trading loss. | |
The mutual savings bank said it lost 600m euros ($807m; £466m) in a derivatives trading incident last week. | |
In a statement, the bank said that the losses would not threaten its financial viability or affect its customers. | In a statement, the bank said that the losses would not threaten its financial viability or affect its customers. |
It blamed the "extreme volatility" in the markets in the week of 6 October for the incident. | |
A Caisse d'Epargne spokesman said the loss was caused by a "small team", which had been sanctioned for exceeding its trading risk limit. | |
The bank said that it had sacked one of the assistants to finance director Julien Carmona. | |
Merger plans | |
Caisse d'Epargne said this latest incident would not affect its plans, announced on 8 October, to merge with another mutual bank, Banque Populaire. | |
The merger would create one of France's biggest banks with 480bn euros of deposits and more than six million customers. | The merger would create one of France's biggest banks with 480bn euros of deposits and more than six million customers. |
The two banks together are the majority shareholders in the investment bank Natixis, which has been among the worst-hit in France by the US sub-prime mortgage crisis. | The two banks together are the majority shareholders in the investment bank Natixis, which has been among the worst-hit in France by the US sub-prime mortgage crisis. |
Seperately, rumours of a big derivatives loss forced Societe Generale and Dexia to issue denials earlier in the week. | |
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