Bouton to stay on as SocGen chairman

PARIS: Societe Generale’s board backed Daniel Bouton as chairman after a record trading loss at France’s second-largest bank led to calls for his departure.

Bouton and co-chief-executive officer Philippe Citerne “have fully assumed their responsibilities since the start of this crisis,” board member Jean-Martin Folz told reporters at the end of a meeting outside Paris on Wednesday.

“The board renewed its confidence in them today.” The board had already rejected an offer by Bouton to step down on January 20, after France’s second-largest bank discovered unauthorised bets by trader Jerome Kerviel that resulted in losses of $7.2 billion.

The largest trading loss in banking history raised doubts about management oversight, and led French President Nicolas Sarkozy to say this week that senior executives at Societe Generale should face ‘consequences’. Bouton, a 57-year-old graduate of France’s elite National School of Administration and a former finance ministry official, said two days ago on Europe 1 radio that his resignation “is still on the table and the board can act on it whenever it chooses.”

The board created a special committee to look into the causes of the trading loss and recommend steps to ensure they can’t occur again. The special committee will be headed by Folz, the former CEO of carmaker Peugeot Citroen, the bank said.