0 Bank of France Conceded Rp 7.7 Trillion

Bank of France Conceded Rp 7.7 Trillion

One of France's largest bank, Caisse d'Epargne suffered losses of up to 600 million euros, or U.S. $ 808 million (Rp 7.7 trillion) due to derivative transactions in the last month. The case has made the French furious and ordered an audit for the entire bank.

The news coincided loss Caisse d'Epargne after the Director approved the proposed merger with Banque Populaire, creating the second largest retail bank in France. However, the management of both companies confirmed, this loss will not matter thwart plans merger of the two banks.

A spokesman for Caisse d'Epargne said the loss was caused by a 'small team' who had been convicted of exceeding the limit trading risks. Julien Carmona, assistant chief of the bank's finances have also been dismissed.

"Because of extreme turmoil and destruction in the stock market on October 6, Caisse d'Epargne had an incident in the derivatives market," the bank said in a statement quoted by AFP.

As quoted by AFP, investigators have come to the Caisse d'Epargne central office to find out if the bank has to use public funds in a transaction deposits at risk by exceeding the limits. If proven, the bank will face a fine of up to 5 million euros.

French Finance Minister, Christine Lagarde later requested a special audit for all banking institutions in France.

"I am particularly frustrated and discouraged because of this had to happen. News of this loss came at the wrong time," said Lagarde.

According to sources from within the bank, Caisse d'Epargne brokers do not respect the rules limiting the amount of transactions they can invest in derivatives markets, although they actually had been warned about the dangers of the transaction due to market conditions.

The bank believes this transaction loss will not affect its stability.

"By looking at our capital levels are more than 20 billion euros and a high level of liquidity, then the loss will not affect the solidity predicament and does not affect the bank's customers," said a statement from the Caisse d'Epargne.

Caisse d'Epargne currently has 27 million customers, of which 24 million of them use the popular savings products' Livret A ". The bank has 51,500 employees. Total customer deposits reached 358 billion euros by the end of 2007. In the first half of 2008, the bank's net profit fell 98.5% to 21 million euros.

Meanwhile, French President Nicolas Sarkozy called the situation 'unacceptable'. As quoted by Reuters on Saturday (18/10/2008) Sarkozy on the sidelines of a meeting of the European Union-Canada states that whoever is responsible for the problems that banks have to bear the consequences.

Burglary is once again reminding all parties burglary case in French bank Societe Generale some time ago. France's second largest bank blames junior trader, Jerome Kerviel for the losses.