Thursday, 24 January 2008

One more unemployed rogue trader

Société Générale €5bn trading loss finally answered a question that has bothered me for some time. What do you have to do to get fired from a bank without a big money pay-off? Jérome Kerviel - the rogue trader behind today's extraordinary losses, answered that question today. After nearly destroying the second largest bank in France, he has been "suspended pending a dismissal procedure".

Although subprime losses are in the tens of billions, surprisingly few people have been held to account. A handful of CEOs have been eased out, typically with massive golden handshakes, but apart from the hapless Mr "evil" Kerviel, I know of no cases of summary dismissals without compensation.

Therein lies are large part of the reason why we are in such a mess. This is rogue capitalism; huge rewards for reckless speculation; no consequences when things go wrong.

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