Jérôme Kerviel's Trial Seems Insignificant Now

Accused rogue trader Jérôme Kerviel arrives at the Paris courthouse where he will be tried. Thibault Camus / AP

It was only 28 months ago that Jérôme Kerviel, a French trader for the Société Générale bank, was accused of losing $5.9 billion of his company’s money by placing massive, unauthorized bets on market swings. Today, Kerviel’s trial began in a Paris courtroom. Charged with breach of trust, forgery, and unauthorized computer use, he faces five years in jail and a maximum $450,000 fine. The defense will put the system on trial—it will argue that Kerviel’s trading in fact wasn’t rogue at all, because, as he maintains, everybody knew. But what’s most striking about the case is the quaint insignificance it has taken on: remember when $5.9 billion seemed like a lot of money?

It has been just 866 days, or 20,800 hours. But far from an isolated, insolent blip, Kerviel was the harbinger of latent systemic insanity. And so call it number fatigue, or acquiescence in the financial crisis that followed Kerviel, but it’s amazing to consider that his crime was once unimaginable. The old press clippings that revealed Kerviel’s alleged ruse in January 2008 haven’t had time to yellow, but it’s hard not to feel nostalgic for those days.

Back when Société Générale chairman Daniel Bouton was calling Kerviel a “terrorist” and President Nicolas Sarkozy was calling for Bouton’s head, when the French trader’s more capitalism-leary compatriots were holding him up as an antihero on a par with Che Guevara, we—the press—were doing what we used to do with great big numbers: putting them into perspective with other big numbers.

Société Générale’s $5.9 billion loss had hacks hitting their calculators to work out how many Airbus A380s or compact cars SocGen’s shock losses could buy. It was the GDP of Afghanistan, it was the entire French welfare budget, it was a $56,200 bonus for every one of the bank’s 120,000 employees. The $59.8 billion Kerviel gambled with, more than what the whole bank was worth and the equivalent of about half of France’s gold and currency reserves at the time, got more of the GDP treatment. Depending on who you read, the $50 billion was helpfully compared to the GDP of Morocco, Bangladesh, or Slovakia. It was the so-called biggest fraud in the history of global finance. It was deemed, you may recall now with a chuckle, “the heist of the century.” (That’s right, this century.)

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Back then, Fannie and Freddie and Lehman and Merrill were still stalwarts. The $700 billion Wall Street bailout was still to come, and the 2009 stimulus package totaling $787 billion was still unthinkable. Bernie Madoff was 11 months from infamy, his Kerviel-dwarfing $65 billion swindle still ticking along undiscovered. Europe’s future debt-threatened PIIGS were unmuddied. The word “trillion” appeared, it still seemed then, only on special occasions and with encyclopedic matter-of-factness, because whatever there was a trillion of had built up slowly over time. “Trillion” didn’t pop up by surprise, as it did last month, when Europe banded with the International Monetary Fund to pledge a trillion-dollar emergency loan-guarantee package for itself. (Speaking of which, back in January 2008, Kerviel’s loss was worth $7.2 billion. At today’s prices, with Europe in a sort of monetary purgatory, it’s a shade less than $6 billion.)

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As it happens, Kerviel never stole a cent of the money he was playing with, but as he once told investigators, “I was in a virtual world. The amounts didn’t make sense anymore. I was caught in a spiral.” Years before, British rogue trader Nick Leeson had a similar experience when his $1.5 billion in losses brought down Barings bank in 1995. “You distance yourself somehow from the quantity of it,” Leeson told an Irish reporter, looking back. “It tends to be numbers that come up on the screen—it does not have the real factor such as the money you have in your pocket.” Double or nothing seems like a big bet if you’re pulling bills out of your wallet; not so much if it just means digits on a screen.

Is that happening to the rest of us—a resignation over figures that once alarmed us? Is there a tipping point where the numbers get so crazy they stop meaning anything concrete and we numb to them? (Would it really help to know how many jets or compact cars a trillion of anything buys?) When $5.9 billion suddenly feels like a survivable loss—when numbers like those seem small-time, or when the once unimaginable treasure we’re throwing at once unimaginable problems starts to seem imaginary again—beware. Or we all become Jérôme Kerviels.

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