SocGen loss symptom of "blind eye" culture: author

PARIS (Reuters) - Bank staff hired to monitor and control trading will "close their eyes" to irregular deals because of fear of better-paid traders and want to become one themselves, said the author of a book on trading psychology.

Ego reigns in trading, and workers are either "dominators" or "dominated", according to Thami Kabbaj, a Paris-based former London hedge fund trader who wrote a French book called "The psychology of top traders".

Back- and middle-office employees are often young university graduates with no practical experience who "do not understand trader psychology and how a trader works", he told Reuters in an interview. "To control a trader, you need to have been a trader."

Kabbaj's comments came as French bank Societe Generale reels from history's biggest rogue trader loss, which it has blamed on Paris-based trader and former middle office worker Jerome Kerviel.

International experts have since warned that the next rogue trader could strike at any time.

Kabbaj said the more lowly employees in the back and middle offices also know their bonuses might depend on the performance of star traders, giving them further incentive to "close their eyes" to dodgy deals.

Traders have an aura around them that makes them difficult to challenge, and Nick Leeson, the Singapore-based rogue trader who brought down Barings Bank a decade ago, enjoyed just such a status, he said.

"It is this myth that gives the trader a margin for maneuver. That was the case for Nick Leeson in Singapore, whose colleagues thought he could do no wrong."

"On the trading floor, the ego takes centre stage ... In this environment, people feel the need to prove themselves to others. Jerome Kerviel undoubtedly wanted to prove his value, to show he was the best."

(Reporting by Julien Toyer, editing by Will Waterman)