After decades of advances in risk management systems, the derivatives market was rocked in January 2008 by a €5bn unauthorised trading loss at Société Générale. Banks tell regulators they have all scrupulously tightened their controls since then. But many experts in the field have their doubts. As Siân Williams reports, spending on controls may be rising, but safety is ultimately a human responsibility.
Ask five people in the futures and options market how the industry manages fraud risk and you will get six answers.
Software companies argue technological investment is a big advantage, banks insist the safeguards they have in place are sufficient.
But recent history shows that even the most sophisticated systems can suddenly go horrendously wrong – indeed, it almost seems as if large frauds are becoming more common.
Fresh in the minds of the derivatives market is...