Caisse d'Epargne management step down after losses

The chairman, chief executive and chief finance officer of Caisse d'Epargne have resigned after the bank admitted it had lost €600 million in unauthorised equity derivative trades.

The bank announced the losses on 17 October, saying that a team of "half a dozen" traders in the prop trading team had put on unauthorised equity derivative positions, which turned negative during the recent volatility in the stock markets.

Charles Milhaud, the bank's chairman, chief executive Nicolas Mérindol and finance and risk management chief Julien Carmona all stepped down yesterday.

Milhaud will be replaced by Bernard Comolet, the chairman of Caisse d'Epargne's Ile-de-France division. Alain Lemaire, chairman of the Provence, Alps and Corsica division, will replace Mérindol. No replacement for Carmona has been named.

The bank added that it is continuing merger negotiations with Banque Populaire, which would make it France's second-largest savings institution.

Milhaud blamed the losses on a combination of exceptional market volatility and traders breaking the restrictions set by the board, but said he would accept responsibility and resign: "I am above all concerned about giving an example of correct behaviour in these severe circumstances," he said, adding that he would not ask for any additional payment.

See also: Caisse D’Epargne hit by unauthorised derivatives loss