New biometric access system for SG
Bank attempts to shore up risk controls in response to internal review
Société Générale (SG) is attempting to shore up its risk controls with the implementation of biometric access controls for dealing personnel. The news follows an internal investigation by a bank committee into the €5 billion rogue trading event that identified major weaknesses in its supervision, security and control procedures.
Rogue junior trader Jérome Kerviel is reported to have faked emails to cover his trades, and used log-in codes from other SG employees to place the unauthorised trades. The review identified priority areas that included the strengthening of IT security through the development of biometric authentication systems, reinforcing controls and alert procedures, and improving the structure and governance of the operational risk management system. Plans for improving access security and conducting targeted security audits are also being pushed forward.
Although the review shows that risk control procedures were followed correctly at SG, routine checks were not supported by more detailed probes, which could have discovered the unauthorised trades much earlier.
The French government, which conducted its own review into the event, also found that the bank's security systems and internal controls were lacking and that the bank missed a number of alarms, notably derivatives exchange Eurex’s alert to the French bank about the positions in Kerviel's book.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Market doesn’t share FSB concerns over basis trade
Industry warns tougher haircut regulation could restrict market capacity as debt issuance rises
FCMs warn of regulatory gaps in crypto clearing
CFTC request for comment uncovers concerns over customer protection and unchecked advertising
UK clearing houses face tougher capital regime than EU peers
Ice resists BoE plan to move second skin in the game higher up capital stack, but members approve
ECB seeks capital clarity on Spire repacks
Dealers split between counterparty credit risk and market risk frameworks for repack RWAs
FSB chief defends global non-bank regulation drive
Schindler slams ‘misconception’ that regulators intend to impose standardised bank-like rules
Fed fractures post-SVB consensus on emergency liquidity
New supervisory principles support FHLB funding over discount window preparedness
Why UPIs could spell goodbye for OTC-Isins
Critics warn UK will miss opportunity to simplify transaction reporting if it spurns UPI
EC’s closing auction plan faces cool reception from markets
Participants say proposal for multiple EU equity closing auctions would split price formation