SocGen deals with bad press
Societe Generale is busy dealing with rumors of buyouts from bigger banks and the rogue trader speaking to the press about the scandal. Stephen Beard talks to Scott Jagow about what the bank is up against.
Societe Generale CEO Daniel Bouton at a press conference outside of Paris. (Martin Bureau/AFP/Getty Images)
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Scott Jagow: The board of French bank Societe Generale met today in Paris. The bank is dealing with an avalanche of bad press in the wake of this rogue trader scandal. The headline in one French paper today was: "Bank chief on ejector seat."
Our European Correspondent, Stephen Beard, is here. Stephen, how'd you like to be a fly on the wall in the meeting today?
Stephen Beard: How would I not like to be the chairman, Daniel Bouton? He's undoubtedly gonna come under a lot of pressure when he's had the French president himself, Nicholas Sarkozy, hinting that heads should roll over this affair.
Jagow: And I know that Societe warned that it does not want any other banks trying to swoop in and take it. Are there other banks that would like to buy it?
Beard: Well, all sorts of rumors are swirling around. It's suggested that BNP Paribas, France's largest bank, is extremely interested. And that in itself has pushed up SocGen's share price by 10 percent. And the rumor has it that the president, Nicholas Sarkozy, is actively trying to promote a takeover by BNP Paribas in order to thwart what he would see as the ultimate national humiliation: France's second-largest bank being taken over by a foreign bank.
Jagow: Mmm. And what about the rogue trader? Is he talking?
Beard: He's singing like a canary. It's claimed in a French magazine that Kerviel made a profit of something like three-quarters of a million dollars in 2005 betting that the London stock market would fall just before the July the 7th tube bombings. He made the profit, and he claimed that he was told by his bosses at the time, "Well, you were lucky this time, but next time, you could lose. We can't go on like this." However, they pocketed the profit, and he says they allowed him to carry on working as before.
Jagow: And the rest is history.
Beard: Hahaha.
Jagow: All right. Stephen Beard in London. Thank you.
Beard: OK, Scott.
