Jerome Kerviel is sentenced: Ruminations on risk and trading scandals
aswathdamodaran.substack.com
A French court has sentenced Jerome Kerviel, the SocGen trader who caused the company to lose 5 billion Euros, to five years in prison and a fine of 4.9 billion Euros. http://www.guardian.co.uk/business/2010/oct/05/jerome-kerviel-jail-sentence I think we can safely assume that Mr. Kerviel is now bankrupt for life. Reading about the case did raise a question in my mind. How can one person cause this much damage and how did the damage remain undetected until too late? I know that people have pointed to the asymmetric reward structure (where huge bonuses are paid if you make large profits and you really don't share in the losses) at banks as a culprit, but I think there are three "behavioral" factors that contribute to disasters such as this one.
Jerome Kerviel is sentenced: Ruminations on risk and trading scandals
Jerome Kerviel is sentenced: Ruminations on…
Jerome Kerviel is sentenced: Ruminations on risk and trading scandals
A French court has sentenced Jerome Kerviel, the SocGen trader who caused the company to lose 5 billion Euros, to five years in prison and a fine of 4.9 billion Euros. http://www.guardian.co.uk/business/2010/oct/05/jerome-kerviel-jail-sentence I think we can safely assume that Mr. Kerviel is now bankrupt for life. Reading about the case did raise a question in my mind. How can one person cause this much damage and how did the damage remain undetected until too late? I know that people have pointed to the asymmetric reward structure (where huge bonuses are paid if you make large profits and you really don't share in the losses) at banks as a culprit, but I think there are three "behavioral" factors that contribute to disasters such as this one.