Underscoring the uncertainty about Europe's financial system, two major French banks -- Societe Generale and Credit Agricole -- were downgraded Wednesday due to their exposure to the debt of Greece and other weak eurozone nations.
When gold prices turn skyward, like they did for the past two weeks before some recent flattening, some mix of greed, fear and uncertainty are likely ruling the market. What better time to remember what really drives prices over the long-term: market fundamentals. Through that lens, gold might not be such a hot investment.
Financial excitement has been in ample supply for ages. The second quarter of 2009 was no exception. Investors should hope that the dramatic rise in most of the world's stock markets in the period -- 15% or so in Europe and the U.S., almost 20% in Japan and more than 50% in some emerging markets -- marks the end of the thrills.
The chairman of Societe Generale, the French bank whose reputation was hit by a massive trading scandal last year, said on Wednesday he would resign in the wake of repeated criticism over his performance.
In the early afternoon of Sunday, Jan. 20, Daniel Bouton, the chairman and chief executive of the huge French bank Société Générale, was in his 35th-floor office preparing for a board meeting that evening when one of his lieutenants, Jean-Pierre Mustier, came to break some calamitous news. Mustier, Société Générale's head of investment banking, had already alerted him about a 31-year-old junior trader in the stock arbitrage department named Jérôme Kerviel who had been caught making big unhedged bets on European stock futures.
An interim report issued Wednesday by independent board members of the French bank Societe Generale has concluded that a trader working alone was responsible for amassing trading losses that exceeded $7.2 billion.
The individual pictured on the cover of the February 18, 2008 issue of FORTUNE magazine and his employer have no connection to Societe Generale, and Fortune did not mean to imply any connection, or to comment in any way on his or his employer's professional abilities.
Societe Generale on Monday launched a heavily discounted €5.5 billion (around $8 billion) rights issue as it attempts to fill a capital gap the French bank says was caused by trader Jerome Kerviel, while also lifting its net profit forecast for 2007.
A French government report into the massive losses at Societe Generale says banks should have greater suspicion about employee fraud and do a better job of notifying the government when the issue arises.
Two weeks after the scandal first broke, we still don't know exactly how Jérôme Kerviel, a lowly 31-year-old trader on the arbitrage desk at French bank Société Générale managed to build a $72 billion position in European stock index futures.
Concerns over the trading carried out by Jerome Kerviel, the trader accused of causing a $7.2 billion loss at Societe Generale, were raised as early as last November, a British newspaper reported Tuesday.
French bank Societe Generale described Sunday how one of its traders allegedly carried out a $7.2 billion (€4.9 billion) fraud, how the loss came to light and what it is doing to ensure such a case does not recur.
The trader accused of making fraudulent transactions that cost Societe Generale €4.9 billion ($7.2 billion) hacked computers and used "several techniques of fraud," the French banking giant has said.
The trader accused of making fraudulent transactions that cost French banking giant Societe Generale €4.9 billion ($7.2 billion) is being questioned in the case, the French national police said Saturday.
Société Générale ranks no. 67 on FORTUNE's Global 500 this year, with $64.4 billion in revenues, up 98.8% from the previous year. The Paris, France-based company was ranked no. 152 on the 2005 list. Its 2005 profits were $5.5 billion, up 42.1% from a year earlier. 2005 was a banner year for most Global 500 companies.