SG report sparks debate on op risk discipline
Société Générale (SG), France's second-largest bank, announced in mid-February that unauthorised trading and subprime-related writedowns led to a record e3.35 billion ($4.9 billion) fourth-quarter loss. The bank also released an initial report into the cause of the rogue trader fraud, which was met with some scepticism from the industry.
Proving once again that banks ignore operational risk issues at their own peril, SG's net loss compares with profit of e1.18 billion in the final quarter of 2006. For the full year, SG's net income fell to e947 million from e5.22 billion. The trading losses, combined with e2.05 billion of writedowns and provisions linked to the US subprime crisis, required the bank to raise e5.5 billion from
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