Société Générale said that it had suffered a sharp drop in new accounts, a sign that potential customers were being scared away by the biggest rogue trader scandal in history, reports The Times.
Six months after Jérôme Kerviel, a junior trader, was accused of losing almost €5bn (£3.69nm), France’s second-biggest bank said that it had registered 23,100 new French accounts in the second quarter, compared with 45,400 in the same period last year.
The decline would appear to indicate waning confidence in the 144-year-old institution. SocGen has been widely criticised for missing repeated alerts about Mr Kerviel, who is accused of hiding his illegal deals in fictitious notes. The bank said that it had been misled by his devious behaviour.
MANUFACTURING AND SERVICES – comprising almost all of the components of the British economy – are now in recession, according to the latest figures, with a further slump in consumer confidence adding to fears that the slowdown could turn into a slump, reports The Independent.
Industrial production fell by 0.8% during the second quarter, the Office for National Statistics reported yesterday, extending the 0.6% decline recorded in the pervious three months.
Perhaps reflecting the recent rapid increase in food costs and decline in leisure spending, output in the food, drink and tobacco industries fell especially sharply, by 1.6%.
A small rise in textile output was the only bright spot in a broadly grim picture. It would appear that even the 12% depreciation in sterling since last autumn has not yet been sufficient to see a boost to orders from exports, thanks to slower growth in the eurozone and in the United States. The outlook for the service sector, meanwhile, is hardly brighter.
COMMODITY STOCKS YESTERDAY SUFFERED further setbacks, as oil hit a three-month low and base metal and mining prices tumbled, indicating fresh distress about the global economic slowdown, reports The Times.
Crude oil sank below $120 a barrel for the first time since June, while gold slumped to a six week low and copper and platinum prices plunged to their lowest level in six months.
Watchers of commodity markets noted a shift in focus from the prospect of a booming China underpinning base metal and oil prices for years to come, to the more immediate threat to demand, especially in the US, from rising inflation and slowing economic growth.
“After several years where the focus has been mainly on tight (commodity) supplies, it seems the markets are finally focusing more on the implications of rapidly weakening demand,” said MF Global analyst Edward Meir.
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