The French bank Société Générale said Thursday that it had uncovered "an exceptional fraud" by a trader that would cost it 4.9 billion euros, or $7.1 billion, and that it was raising about 5.5 billion euros in fresh capital to shore up its finances.

The company, one of the biggest banks in France, said in a statement that the fraud had been committed by a trader in charge of "plain vanilla" hedging on European index futures.
During a conference call, Société Générale's chairman and chief executive, Daniel Bouton, said the bank had started legal proceedings against the rogue trader, whom he did not identify; he also said the trader's whereabouts was unknown. The trader is "on the run," officials said.
A banker close to the situation identified the trader as Jé&ociec;me Kerviel, a Frenchman in his 30s who joined the bank in 2000.
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Speaking at an afternoon press conference, Christian Noyer, governor of the French central bank, the Bank of France, described the trader as a computer "genius."
"I am totally serene," Mr. Noyer said. "I wouldn't be if the bank wasn't in a very solid situation. There's no problem of confidence for consumers for depositors, for clients." Fraud Costs French Bank $7.1 Billion

First, I wouldn't call a $7 billion dollar fraud simply "exceptional" and secondly, I certainly wouldn't be "serene" about its effects. Serene is how our politicians, bankers, and former Fed Chairman, Alan Greenspan (who left just before the crisis began), seemed to handle the housing bubble two years ago. Now they are scrambling to convince the country we can avoid a recession, while we head into a depression.