FACTBOX: More questions than answers after SocGen fraud

(Reuters) - The biggest rogue trader scandal in history hit French bank Societe Generale on Thursday, with a junior employee accused of a fraud costing $7 billion.

But the crisis has raised more questions than answers about the reasons for the fraud, how it was implemented and escalated, and what it means for the banking industry.

Here are some key issues still unknown:

--WHERE IS JEROME KERVIEL?

The 31-year-old has been named by banking sources as the man behind the fraud, although SocGen has still not confirmed the identity of the rogue dealer.

A photograph of an unsmiling Kerviel has been carried by the world's media, but none have tracked him down. Dubbed "the man who blew up the bank" by French daily Le Parisien, he has been variously described as a genius and a troubled introvert.

A lawyer claiming to represent Kerveil said he was not on the run and was ready to cooperate with investigators.

"I am sure he is very scared," Nick Leeson, the rogue trader who was at the centre of similar controversy when he cost British bank Barings $1.4 billion over a decade ago, told Irish media.

--DID KERVIEL ACT ALONE?

In the absence of Kerviel, conspiracy theories abound.

SocGen said the trader acted alone, but there was widespread speculation that fraud on such scale would have been impossible without some help. The trader and up to six supervisors above him have been fired.

--HOW WAS FRAUD ACHIEVED?

Positions on "plain vanilla" European stock market futures contracts were able to be hidden because the trader knew procedures after previously working in the back office, SocGen said.

He appears to have used false client names and faked hedging positions, but full details of how he ran rings around SocGen's sophisticated anti-fraud systems from a desk at headquarters may never emerge.

Also unclear is whether counterparties or clearing houses could have spotted the problems earlier and limited the scale of the crisis.

SocGen's loss was exacerbated because when it started unwinding positions on Monday stock markets were in a tailspin. Futures allow an investor to leverage a position, so SocGen many have had to unwind a 30-50 billion euro ($44 billion-$73 billion) position.

--DID FRAUD CAUSE OR FEED STOCK MARKET TURMOIL?

The firesale added fuel to Monday's stock market sell-off, which provoked the U.S. Federal Reserve to cut interest rates by 75 basis points on Tuesday.

The Federal Reserve said it had not been aware of SocGen's problems when it decided to cut rates and Asian markets had already been tumbling before European markets, so how far did the fraud contribute to the U.S. rate cut?

--WILL SOCGEN, CHAIRMAN SURVIVE?

SocGen could be forced into the arms of long-time suitor and arch-rival BNP Paribas, bankers and analysts say.

Potential buyers will cast an eye on SocGen as it reels from the crisis, and the prospect of a takeover lent support to shares, which had already fallen by a third since August, valuing it at 35 billion euros.

SocGen Chairman Daniel Bouton offered to quit but was asked to stay on. Analysts question whether he will be able to stay at the helm.

--WHAT'S THE INDUSTRY FALLOUT?

The fraud darkened the cloud over an industry already tarnished by a deepening credit crunch and banks face a struggle to restore confidence among investors and customers.

Politicians and central bankers say the crisis was a one-off and did not call into question the solidity of the French or European financial system.

But it posed questions over banks' business models and their capital positions and a need to address them while facing the headwind of a sharp economic downturn.

--CAN RISK CONTROL EVER BE GOOD ENOUGH?

Shock at how the trader evaded detection was replaced by the realization that all banks are fallible despite years of tightening risk controls in the wake of Leeson's fraud.

Rogue traders can still elude the most sophisticated security systems until it is too late. As banks make more money and take bigger trading positions it could leave them open to even bigger frauds in the future and mean they come under even more regulatory scrutiny.

(Editing by David Cowell)