UPDATE 4-Caisse d'Epargne top execs resign after trading loss

Sun Oct 19, 2008 6:07pm EDT
 
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* Chairman, CEO, finance head resigns after trading loss

* Bernard Comolet named new chairman, Alain Lemaire CEO (Adds CEO, finance head resignation, new board members)

By Sudip Kar Gupta and Anna Willard

PARIS, Oct 19 (Reuters) - The chairman, chief executive and finance head of Groupe Caisse d'Epargne resigned on Sunday, following a 600 million euro ($808 million) trading loss at the French mutual bank which drew the anger of France's president.

"I accept full responsibility," Chairman Charles Milhaud said in a statement.

Chief Executive Nicolas Merindol and finance head Julien Carmona also resigned from their posts.

Caisse d'Epargne said Bernard Comolet would become its new chairman, while Alain Lemaire would become chief executive.

Both Comolet and Lemaire are already at the group. Comolet is the head of the Caisse d'Epargne dealing with the Paris region, while Lemaire runs the Caisse d'Epargne branch dealing with the Provence-Alpes-Corse region.

Last week Caisse d'Epargne, which is planning to merge with Banque Populaire, revealed the trading loss which occurred due to a small team of traders making a disastrous bet on the stock markets.

The loss prompted Economy Minister Christine Lagarde to ask for a special audit of all banking institutions in France, and President Nicolas Sarkozy called the situation "unacceptable."

European Central Bank President Jean-Claude Trichet said he was shocked by the losses at the bank.

"When we know who is responsible, we must obviously draw conclusions," he said on RTL radio.

MERGER

Milhaud is the latest scalp claimed by the global credit crunch. In Britain, Royal Bank of Scotland (RBS.L) chief executive Fred Goodwin was ousted after the British government part-nationalised the bank following huge writedowns on structured products.

The former heads of Franco-Belgian bank Dexia (DEXI.PA) were also forced out following a bailout package by the governments of France, Belgium and Luxembourg.

Caisse d'Epargne said the "small team" of traders behind the trading loss had exceeded their trading risk limit and had been punished by the bank.  Continued...

 

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