Losses may lead to Societe General merger

PARIS, Jan. 28 (UPI) -- Losses of more than $7 billion from unauthorized trading may end up forcing Paris's Societe Generale bank to merge with its biggest rival.

The New York Times reported that fallout from the scandal could include executives losing their jobs and the need for the bank to merge with another, including rival BNP Paribas, which claims the largest banking revenue in Paris.

Societe Generale's aggressive push in to equity derivatives trading, which began in 1987, helped France claim 25 percent of that global market, the report said. But the sophisticated technology that helped them pull it off also allegedly helped the rogue trader hide his activities, the Times said.

While the fallout is uncertain, Society Generale executives said it took only three days to enact stop-gap measures that would prevent a repeat of the incident, which resulted in record losses by a rogue trader.

The bank acknowledged that Jerome Kerviel's activities prompted several inquiries last year but said that he was able to provide explanations so bank officials didn't order an internal investigation.

Equity derivatives trading accounts for 20 percent of the bank's profits. In 2006, the bank reported a net income of $7.65 billion.