Thursday 31 January 2008

Large wonga

I have been following the twists and turns of the Soc Gen guy who lost the bank a few billions. When it first broke I had two main thoughts. One - the French were jealous of our Northern Rock saga and wanted to show they were as good as us and Two, what the hell was Avec Frits going to do with the money he was dealing in if he had got it outside the bank? This latter point was made more interesting when the Kent Securicor trial finished. They had to settle with just 53 million as the truck they had was limited to a 8 ton cargo. So, just how would the French guy disappear into the mists with the bulge in his trousers that was 2 billion? Shifting that from France to Brazil would leave a trail.
Some clarification came when the police chose not to include straight theft in their charges and appear to have accepted that what was done was meant to raise the prestige of the trader. I will leave aside wondering how he thought he might maintain his winning ways through the rest of his career based as they were upon severe bending of the control systems. These must surely have led to his downfall given time.
So - reduction of interest in Soc Gen. Except - how do banks handle these profits and losses or the monies involved when company A buys company B for a couple of billion quids?. Well, there is a system but, don't worry, I'm not going to go into it here. However, have a look at what Wikipedia says about fiat money (no, not the price of a small car for the Attorney General ) and representative money. What these have to do with the price of fish is (exhaustively I warn you) dealt with by a paper considering changes.
Having read that jogged my memory of extremely smart men seen on the streets of the City of London. They wore formal morning dress and were topped of by extremely shiny silk top hats. These were bank messengers and they were the carriers of settlement notes between banks. Doubtless, it is now all done by electronic means (and open to fiddles).
Another piece of useless information that came with my inquiries was that the largest value Euro bank note (representative money now we know!) is 500 euros. So, our French friend would have had a problem ordering Le Grande Mac avec jambon and offering a whopper as payment.


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