Financial Times FT.com

Société Générale

Fallibility of risk controls highlighted

By Chris Hughes, Peggy Hollinger, Jennifer Hughes and Jeremy Grant

Published: January 24 2008 20:32 | Last updated: January 24 2008 20:32

That a bank of Société Générale’s status could fall prey to a rogue trader shows the fallibility of banks’ risk-management and accounting systems – a weakness regulators may tackle with tighter supervision if not fresh regulation.

Top derivatives traders say it is not hard to imagine a chain of failures in the departments responsible for risk management that could have led to big positions being taken at SocGen without alarm bells ringing.

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