Paris - The chairperson and two other top executives of French mutual bank, Caisse d'Epargne, quit on Sunday over an €600m derivative trading loss at the height of the global finance crisis.
The chairperson, Charles Milhaud, said in a statement after an emergency supervisory board meeting he would not take a leaving payment. The director general and head of finance for the bank also quit posts.
The bank said it lost €600m in a derivatives trading "incident" on October 6 as world share markets were crashing over the global finance crisis. The bank was also entering merger talks with rival Banque Populaire.
There has been widespread government and public anger led by President Nicolas Sarkozy.
"This loss is the result of the exceptional volatility of the markets during this period and the breach of instructions that the board and myself gave," Milhaud said in a written statement.
"I accept entire responsibility, however. Having devoted my entire life to the Caisse d'Epargne, I have never at any moment considered trying to avoid my responsibilities," he added.
"Those who know me know that I am not a man of money. I am not asking for any indemnity," he added.
Milhaud, 65, has been in charge of the Caisse d'Epargne since 1999. He left the board meeting without commenting to journalists. A source close to the bank said Bernard Comolet, head of the bank's Paris region operations, will take over as the group chairman.
Director-general Nicolas Merindol and head of risk and finance Julien Carmona also resigned their posts at the meeting.
Sarkozy assailed the losses from high-risk derivatives trading as "unacceptable" at a time when European governments were scrambling to shore up confidence in banking.
Milhaud made a public mea culpa in an interview with the Journal du Dimanche newspaper. "Yes I do feel responsible," he said. "Believe me, this incident is serious and is profoundly upsetting for me."
'Rules violated'
The scandal revived memories of the disaster at French bank, Societe Generale, which lost €4.9bn in unauthorised deals made by junior trader Jerome Kerviel.
Milhaud told the Journal du Dimanche he first learned of a €100m loss on derivatives last Monday and that he asked for the deals to be immediately unwound.
While the banker acknowledged that "some rules had been violated," he said tighter regulations were not the foolproof answer.
"You can invent the best system on Earth, boost oversight and alerts, but you are still dealing with men and this entails risks," said Milhaud.
Sarkozy said there had been "an absurd lack of responsibility." The hole in the bank's accounts are "enough so that those responsible should know they will bear the consequences."
Finance Minister Christine Lagarde has ordered the banking commission to conduct an audit of the bank's trading activities.
Milhaud has confirmed that several employees were fired including the team of traders responsible for the blunder.
News of the loss came in the same week as Caisse d'Epargne directors approved plans to start merger talks with Banque Populaire to form France's second-largest retail bank.
It also came days after the French government rolled out a massive €360bn bank rescue plan, offering loan guarantees and capital to avert financial collapse in the eurozone's second economy.
Caisse d'Epargne has 27 million account holders - nearly half of all savers in France - and employs 51 500 people.
- AFP