Hope you guess my name
But what's confusing you
Is just the nature of my game
I'm the man who broke the bank:
On the elite trading floors here, where France's brightest minds devise some of the most complex instruments in global finance, few people noticed Jérôme Kerviel.
He was lucky to be there at all. Many of his colleagues had been plucked from the prestigious Grandes Écoles - the Harvards and MITs of France - and wielded advanced degrees in math or engineering. Kerviel arrived from business school and started out shuffling paper in the back office.
But on Thursday the world came to know Kerviel, 31, as the suspected most dangerous rogue trader ever, a young gambler who found himself sucked into a spiral of losses that left a $7.2 billion hole in Société Générale, one of France's largest and most respected banks with operations throughout the world....
"There are plenty of excellent brains at Société Générale, consequently I find it hard to believe the risk management systems and all the auditors did not indicate anything at any level," said Helyette Geman, a professor of mathematical finance at Essec, a leading French business school, as well as a professor at the University of London.
It is a remarkable turn of events for Société Générale, which since the mid-1980s has built itself into a global powerhouse in trading derivatives like futures and options.
"In France we considered Société Générale a magic bank," Geman said.
....But Kerviel, described by bank executives as a shy junior trader, did not fit the mold at Société Générale. The bank lures its top talent from country's premier science and engineering schools in Paris.
Kerviel grew up in Brittany, in western France, and attended the University of Lyon. He joined Société Générale in 2000 as, in effect, a clerk - processing and recording the trades made on the trading floor.
By 2006, Kerviel had worked his way up to the trading floor, where he specialized in arbitrage, or making bets on small differences between various European stock market indexes like the CAC, in France, and DAX, in Germany.
A senior banker at Société Générale described Kerviel "as a very junior trader, not a star." As far as his superiors knew, this banker said, "he was starting to work on a small portfolio. He's more of a shy person than an extrovert."
No comments:
Post a Comment