Looking to beat the backlog
The EUR4.9 billion loss at Societe Generale has highlighted the risks posed by backlogs in equity derivatives confirmations. How serious is the problem and how is electronic trade processing helping the situation? Ryan Davidson reports
As auditors, prosecutors and regulators continue to pick through the pieces of the EUR4.9 billion ($7.7 billion) loss at Societe Generale (SG), risk managers at rival firms are trying to make sense of how a trader could seemingly hide huge directional exposures on European equity indexes by entering fictitious trades into the French bank's systems. Details released by SG suggest a massive breakdown in risk controls and processes - among them, a failure by the back office to confirm fictitious
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