Bank of France to open inquiry into Socgen fraud

The Bank of France said on Thursday it would open an inquiry into an alleged fraud at French bank Societe Generale which will have a 4.9 billion euros negative impact on the group.

The central bank said it had been immediately informed about the fraud and noted the bank had taken steps to reinforce its capital in the light of the news and the crisis in financial markets.

"In these conditions, the financial situation of the bank does not require any particular comment," the Bank of France said in a statement.

Bank of France Governor Christian Noyer, who is also a governing council member of the European Central Bank, will hold a news conference on SocGen at 1330 GMT.

Last Friday, Noyer said in an interview with the International Herald Tribune that he was not expecting any "strong shocks" from French banks' 2007 earnings.

He said he was reasonably confident that French banks were in a position to weather the turmoil in financial markets.

SocGen also announced on Thursday a 2.05 billion euros writedown related to the global credit crunch.

The IHT website reported Noyer as saying, without directly quoting him, that he had been assessing the balance sheets of banks like SocGen and BNP Paribas before they revealed their 2007 results.

However, the Bank of France later issued a statement saying: "In the interview that appeared today, Governor Christian Noyer at no moment mentioned the name of a bank."
Source : http://www.reuters.com