Quotes of the Day

Just a week ago, when global markets from Bombay to Wall Street were tanking, few investors had ever heard the name Jérôme Kerviel. Why would they? The 31-year-old from small-town Brittany in France was a low-level futures trader. One week later, Kerviel — the rogue trader who has lost Société Générale $7.1 billion) — now has 347,000 hits on Google, 14 groups dedicated to him on Facebook, and a Wikipedia biography — and the mounting political scandal over how he pulled off the biggest scam in banking history is only just beginning.

Still reeling from the scandal, bank executives spent the weekend scrambling to explain themselves to reporters and bracing themselves for what they are likely to face during the coming days: A bruising reckoning with top government officials. Bank of France governor Christian Noyer has been summoned to appear at a Wednesday crisis hearing in the Senate. And officials for President Nicolas Sarkozy were quoted in French and British newspapers saying that the French leader was enraged that Société Générale executives had waited at least three days before telling him that they'd uncovered the giant fraud. Sarkozy had good reason for unhappiness. When the scandal broke late on Wednesday night he was in New Delhi signing business deals with Indian officials, and trumpeting France as a dynamic country open to foreign investment. "The President was not very happy and he has let it be known at the Bank of France," one unnamed official told the British Daily Telegraph.

Days before, Société Générale executives had discovered Kerviel's massive illicit operation, after the trader had gambled positions worth about $73 billion. That's actually more than the bank's entire worth by around $25 billion. Instantly, this evoked comparisons in the media with another lone rogue, Nick Leeson, whose fictitious trades in Singapore lost $1.4 billion for Barings Bank in 1995, wiping out the bank's cash reserves. Leeson was arrested after an international manhunt, and spent more than three years in a Singapore jail. By contrast, Société Générale executives simply suspended Kerviel — perhaps to avoid panic selling. Executives then quietly unwound his disastrous transactions on the financial markets over the course of three days — so helping to send markets plummeting around the world.

Société Générale's head of corporate and investment banking Jean-Pierre Mustier admitted to reporters on Sunday that their forced sell-off had probably furthered last week's market slump. "I cannot deny that if we had not been selling the market would have fallen less," he said, though he said he thought its effect had been "minimal." With the markets in turmoil, the dark-haired, slim trader slipped out of sight, surrendering to financial police only on Saturday afternoon. Kerviel remains in custody in Paris but so far faces no criminal charges. The clock is running however: by early afternoon Monday, police must either free him or present Kerviel to a judge for the opening of a full judicial investigation into charges of fraud.

Outside, the hard questioning of bank executives has already begun. Hammered by reporters on a conference call on Sunday, Mustier said Kerviel had outwitted the bank's internal control department for nearly a year, partly by changing the financial instruments he traded — thus triggering attention from departments that knew nothing of his trading history. Kerviel learned the intricacies of the bank's controls during his time working in middle-office jobs, before moving to the trading floor in 2005. "He chose very specific operations which were not involving any cash movements," Mustier said. "He managed to place transactions which did not require immediate confirmations."

Kerviel had yet to answer publicly some of the scheme's most intriguing questions: Did he personally sock away millions from his fictitious trading? And if not, what made a quiet trader — whose Facebook page had just 11 friends — engage in a gargantuan con job and risk years in jail? Those answers might have to wait for Kerviel's trial. Or perhaps for another movie along the lines of the 1999 film Rogue Trader, which portrayed Leeson's extraordinary operation. And should you wish to try and make some money yourself, Leeson has been quoted by one British bookie at odds of 50-1 to play Kerviel.

• Vivienne Walt/Paris
• The political scandal over how Jérome Kerviel pulled off the biggest scam in banking history is just beginning