SocGen trader ran up 50 billion euro bet

By Crispian Balmer and Tim Hepher

PARIS (Reuters) - French bank Societe Generale defended its handling of the world's biggest trading scandal on Sunday, but admitted its risk systems had failed to detect a 50-billion-euro (37 billion pounds) market bet by a lone trader.

Prosecutors said the trader, named as 31-year-old Jerome Kerviel, would remain in custody until Monday after handing himself in on Saturday, and was co-operating with a probe into how the bank ran up $7 billion (3.6 billion pounds) losses on the illicit deals.

"The inquiry ... is extremely fruitful," Jean Michel Aldebert, the head of the financial section of the Paris prosecutors office, told reporters on Sunday afternoon.

"The detention is going very well. (Kerviel) is talking about the things he has been accused of," he added.

Kerviel's lawyer said he had not committed embezzlement, had "not stolen a single cent" and was "just doing his job".

"He took some risks but that's what he is paid for. The bank liquidated his positions in atrocious (market) conditions, so the bank is responsible for losing the 4.9 billion euros," Christian Charriere-Bournazel told Reuters.

Many market experts have cast doubt on SocGen's affirmation that a single trader was able to conceal positions that were higher than the gross domestic product of Morocco.

In a statement on Sunday, the bank said its staffer created fictitious accounts to make it look as though his positions had been covered, when in fact they remained open.