Caisse D'Epargne Chairman Quits Over Derivatives Trading Loss

Paris, France (AHN) - Charles Milhaud, chairman of French bank Caisse d'Epargne, took responsibility for the $797 million loss suffered by the bank during a derivatives trading earlier this month.

As a sign of his regret, Milhaud resigned as chairman with the expectation that he would not receive any benefits from the bank.

Beside Milhaud, the bank's director general and chief financial officer had also quit their posts.

French President Nicolas Sarkozy called the Caisse losses unacceptable, while Finance Minister Christine Lagarde ordered a special audit of all French banks. They said the resignation of key Caisse officials involved in the derivatives trading incident is expected to restore confidence in the French banking industry.

The loss, which occurred Oct. 6, was reported by the bank after the French government approved last week a $491 billion (360 billion euro) bailout package for financially distressed French banks. The loss and the resignation of vital Caisse bank officials are expected not to affect ongoing merger plans with Banque Populaire.