http://www.hemscott.com/news/latest-news/item.do?newsId=63241245980070

PARIS (Thomson Financial) – Societe Generale’s planned investment of 50 million to 100 million euros to bolster its internal trading controls after a costly scandal has other banks and analysts wondering why the price of shoring up the bank is that high as indications were that human factors and small errors were largely to blame.

Societe Generale had no immediate comment on how the funds will be spent, although newspaper Le Figaro recently said the group would install software to review trading activity more closely.

The scandal involving alleged unauthorised trading has cost Societe Generale 4.9 billion euros, partly from trades and partly from the unwinding of related market positions. It forced the banking group to raise 5.5 billion euros in new capital.

Sources at other French banks said controls throughout the sector are generally similar and effective if applied in a ‘best practice’ mode.

An interesting article talking about the bank’s planned investment to improve trading controls. Investment in this area can only be a good thing for the shareholders or stakeholders in the business.

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