Societe Generale orders its traders to lay off Greece: CEO

21st May 2010, Comments 0 comments

French bank Societe Generale has ordered its traders not to speculate against Greek bonds, chief executive Frederic Oudea said in a newspaper interview Friday.

"Our teams have received an order not to speculate on Greek debt," Oudea told French daily Liberation, noting that Sociate Generale had helped the Greek government "find buyers for debt it issues."

"That's part of our job and it's indispensable for the functioning of the European economy," he said.

Greek bond yields -- the rate of return -- hit record highs as the country battled in recent weeks to avert default, which it only escaped thanks to a 110 billion euro (138 billion dollar) EU-IMF bailout.

Germany has led calls in Europe for a crackdown on financial market speculation which Berlin and other European governments see as destabilising debt-ladened economies such as Greece but also Spain and Portugal.

Societe Generale said on May 5 that it had exposure of about three billion euros to Greek debt on top of its 54 percent stake in Greek lender Geniki Bank.

Foreign banks are exposed to 236.2 billion dollars of public and private debt in Greece, and nearly a third of it is held by French banks with holdings of 75.2 billion dollars, according to the Bank for International Settlements.

© 2010 AFP

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