KEY POINTS:
He is the man who nearly broke the bank ... and who is fast becoming a hero to millions of his compatriots.
Jerome Kerviel, the 31-year-old trader whose fraudulent stock market transactions last week cost his employers Societe Generale ¬4.9 billion ($9.3 billion) was yesterday in a Paris police station after being taken into custody by French financial police who managed to get him past journalists waiting at the gates without being spotted.
Lawyers for Kerviel said their client was "entirely prepared to co-operate with the authorities".
France has become polarised around the unlikely figure of the taciturn, clean-cut man behind the biggest "rogue trader" scandal.
About 480km west of Paris, in his home village of Pont-l'Abbe at the tip of the Brittany peninsula, Kerviel is a hero - particularly among the ladies in the hair salon his mother used to own.
"He was your ideal son-in-law," said 62-year-old client Martine Le Pohon, who remembers Jerome helping his mother out on Saturdays at Un Monde Imagin' Hair. "And if it turns out that he has stood up to the system to the tune of ¬5 billion, well, as far as I am concerned, that makes him even more ideal."
Maryvonne Even, 40, said Kerviel was a scapegoat. "He was probably caught fiddling - a bit - and the bosses decided to blame him for all their losses," she said.
But it is not just the famous local Breton solidarity. In France, where there is a profound popular distrust of big finance, strong opposition to "international capitalism" and a belief in the "French model" as opposed to "savage Anglo-Saxon Liberalism", the views of the ladies in the Pont-L'Abbe hair salon are widespread.
For Isabelle Mercier, 44, queuing outside Societe Generale in eastern Paris, the "rich and the powerful" always find someone to blame. "Anyone who is a threat to them is eliminated one way or another."
Mohammed Benali, a market trader at the nearby Marche d'Aligre, agreed. "It is time the bosses and the rich were taken down a peg," he said.
Some go further. The French Communist party compared Kerviel to Alfred Dreyfus, the French Jewish Army officer whose disgrace and imprisonment after being unjustly accused of espionage is one of the greatest and most divisive causes celebres in the nation's recent history.
On the internet, scores of messages expressing admiration have been posted on impromptu sites. The affair has been politicised further by the revelation that Kerviel had once been an activist for France's ruling right-wing UMP party.
The Government of Nicolas Sarkozy, already under fire for being too close to French financial figures, has been forced on to the defensive. For Michel Sapin, the Socialist Party's economy and tax spokesman, the scandal was "the symbol of mad money".
Details continue to emerge of Kerviel's background and how he became the biggest individual financial fraudster in history.
Described as a "fragile soul with an extraordinary talent for dissimulation" by his bosses, he grew up in an impeccably kept modern semi-detached house with granite finishings, a dainty rosebed and white picket fence on the outskirts of Pont-L'Abbe, a town of 7000. Kerviel's mother, Marie-Jose, sold her salon two years ago when her husband, a metalwork teacher, died suddenly from liver cancer. The shock of his father's death is said to have badly affected the young man whose wife is reported to have left him shortly afterwards.
Neighbours said Marie-Jose Kerviel had gone to Paris to see her son "several days ago". On his most recent CV Kerviel lists his hobbies as sailing and judo.
Philippe Orhant, his former judo teacher, described the young man as "a very centred, focused personality".
Nicolas Gessant, a former high school class mate, said Kerviel had not been particularly brilliant at school. "He was a good mate; fun. But it was when he started studying economics for the baccalaureat that his talent came out," Gessant said.
"Later, when he began doing economic sciences at the [nearby town of] Quimper, he turned out to be brilliant."
According to his CV, Kerviel studied at Nantes University and then at Lyon.
Joining SocGen in 2000, Kerviel spent two years in the back office learning about the bank's security systems. From 2002 to 2004, he was a "trading assistant", working on the complex European derivative products SocGen had pioneered.
His CV backs up the impression of a dry, introverted, brilliant but distant young man.
"He spoke very little, answering questions with nothing more than a yes or a no," said one colleague. Yet he rose steadily, finally becoming a trader in March 2004, specialising in the esoteric products his bank was known for - derivatives on European markets, on the relatively low salary of ¬100,000. He worked hard and kept a low profile. According to friends, he had not taken a holiday since April last year.
Kerviel's motives are still unclear. Some have argued he was hoping to boost his bonus, others that he was involved in a vast insider trading ring. For the moment, there is no evidence of either, though investigations are continuing.
Daniel Boutin, SocGen CEO, said the trader's motives were "incomprehensible".
- OBSERVER
JEROME KERVIEL, HERO OR VILLAIN?
FOR
Societe Generale's decision to dump more than ¬50 billion ($95 billion) in unauthorised trades by Jerome Kerviel last week plunged European stock exchanges into a tailspin. Market experts pointed out that heavy selling by SocGen reinforced a mood of panic and helped push all markets down. This in turn jolted the United States Federal Reserve into cutting its interest rates sharply, preventing a copycat crash on Wall Street and possibly also steering the world out of recession. As a result, some respected US economists are now feting Kerviel as an unwitting saviour. "Merci, Jerome," said the influential economic analyst Ed Yardeni, former head economist of Deutsche Bank Securities.
AGAINST
A junior trader at his desk in a building just west of Paris accidentally nudged the steering wheel of the entire world economy. What does that tell us about the uncontrolled might of the immense sums of "electronic" money now being traded on futures and hedge funds? A young man earning ¬100,000 a year was allegedly gripped by a belief that he had discovered a magic new trading formula. He was able to make unauthorised trades on share futures worth at least ¬50 billion. For the whole of last year, Kerviel was making massive, secret trades. He made a profit he could not easily explain to his bosses, so he set out this month to make a deliberate, off-setting "loss".
- INDEPENDENT
