There is now a face to go with the legacy of Jérôme Kerviel.
Meanwhile, check this out (NYTimes):
The timing could hardly have been worse. Société Générale was forced to begin unwinding the trades on Monday “under conditions of extreme market volatility,” Mr. Bouton said.
Bank officials insisted that the volume of their sales on Monday was not large enough to have a major influence on markets.
MASSIVE RISK
Well, let's do the math. These were simple directional bets (futures contracts - "Delta One"), reportedly. He lost $7.2 billion. On a 10% adverse move that implies a notional position of $72 billion [!]. Even a 20% adverse move would imply a notional position of $36 billion.
Yeah, I think dumping $36 to $72 billion on one day in the market would be pretty massive. [Oh, yeah, and if I were a regulator and I didn't know about what was going on from SoGen, I'd be throwing-the-phone mad.]
Anyway, if that's not right, then something else is at work. Maybe the losses somehow occurred over a long period of time. Maybe there is also more to the story...
