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| France reacts to trading scandal | |
| (20 minutes later) | |
| France's Finance Ministry has called for tighter banking controls after the Societe Generale trading scandal. | France's Finance Ministry has called for tighter banking controls after the Societe Generale trading scandal. |
| Christine Lagarde, France's economy minister, said some of the bank's internal controls did not work. | |
| She made the comments as she delivered a report on the bank's trading losses to the French government. | She made the comments as she delivered a report on the bank's trading losses to the French government. |
| The bank blames junior trader Jerome Kerviel for a 4.9bn-euro ($7bn; £3.7bn) loss, though he has reportedly said it knew the risks he was taking. | The bank blames junior trader Jerome Kerviel for a 4.9bn-euro ($7bn; £3.7bn) loss, though he has reportedly said it knew the risks he was taking. |
| "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Ms Lagarde said. | |
| The report into the scandal also called for clearer divisions between the roles of government and regulators, and it recommended the banking commission be able to impose tougher penalties. | |
| It also proposed talks with major trading partners on the scandal to ensure that international standards apply. | |
| Rules followed | |
| Ms Lagarde said the bank followed rules on disclosure of market information when it unwound the unauthorised transactions by Mr Kerviel. | |
| "The unwinding of the positions at the source of the loss on 21, 22 and 23 January was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Ms Lagarde said. | "The unwinding of the positions at the source of the loss on 21, 22 and 23 January was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Ms Lagarde said. |
| Some analysts have said Societe Generale was behind sharp falls in European stock indexes during January. | Some analysts have said Societe Generale was behind sharp falls in European stock indexes during January. |
| The bank's chief Daniel Bouton has been under pressure to resign over the trading scandal, but last week the Societe Generale board gave Mr Bouton their backing. |