The Financial Times of London is reporting this morning that one of France's biggest savings bank, Groupe Caisse Dâ''Epargne, suffered a â'¬600m loss on equity derivatives trading last week after a team of traders took unauthorized positions.
The bank said that its normal internal control discovered the loss, and that the traders had been sanctioned.
The FT said that the loss occurred in the Caisse Dâ''Epargneâ''s proprietary trading division which is in the process of being closed down (a made decision last June).
Instructions were issued to trading team heads to limit their exposures but the small team of traders allegedly exceeded their limits and were only exposed by last weekâ''s stock market crash. (That little fact does make you wonder, though, how well the internal controls actually worked.)
The bank also noted that the loss would not affect its financial position or harm customers.
This is a much different outcome than what happened with French bank SociÃ©tÃ© GÃ©nÃ©rale SA admitted were a "rogue trader" lost $7.2 billion in trades by by-passing five levels of controls for a year before finally slipping up and getting caught.