January is quite an eventful month for the financial sector. We have 1500+ KLSE, poor quarter result from Citi, Merrill, Morgan Stanley and etc, stimulus plan from bush (fighting recession instead of terror! haha), fed surprise 75bp rate cut and of course, the biggest scandal in financial history.
A rogue trader named Jerome Kiervel used his position, plus a knowledge of the bank's security system, to construct 'a scheme of elaborate fictitious transactions' on European equity markets. The fraud had caused €4.9 billion loss and adding more salt to the wound, the bank post additional 2 billion write-down because of the exposure to the U.S subprime mortgage crisis. The second largest France's bank suffered total loss of €6.9 billion euro and they are now trying to raise €5.5 billion in new capital to restore their balance sheet. Unlike what Nick Leeson did to Barings in 1995, Jerome did not bring down the company this time.
I have been wondering, how could such a so called 'ordinary' employee does this kind of stunt without the help of anyone else inside? €4.9 billion is a big figures, I could be billionaire if i owned 20% of the losses ^.^
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