1. Peter Gumble, European editor for Fortune magazine, comments, “Kerviel is a stunning
example of a trader breaking the rules, but he’s by no means alone. One of the dirty little
secrets of trading floors around the world is that every so often, somebody is caught concealing
a position and is quickly—and quietly—dismissed…. [This] might be shocking for people
unfamiliar with the macho, high-risk, high-reward culture of most trading floors, but consider
this: the only way banks can tell who will turn into a good trader and who won’t is by giving
every youngster it hires a chance to show his mettle. That means allowing even the most
junior traders to take aggressive positions. This leeway is supposed to be matched by
careful controls, but clearly they aren’t foolproof.”11 What is your reaction to this statement
by Mr. Gumble?
A. - Trading is one way of getting a business bigger as the owner's goal. When we talk about it, it means a lot of money that will continue to come within the business itself. Every person has all the right to show their capacity on their desire work. Every secret trade of a business has a big plan from the major people among the executives. This means money and everything has to be done according to the plan.
2. What explanation can there be for the failure of SocGen’s internal control system to detect
Kerviel’s transactions while Eurex detected many suspicious transactions?
A. - SocGen trusted Kerviel that much that they don't detect any suspicious transaction of Kerviel. Eurex on the other hand suspected Kerviel because of the money he earned. He used his ability and his knowledge to make a bigger money and he used the secret trade for this transaction.
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