Banks zoom in on risk control systems after SocGen

By Saeed Azhar and Olesya Dmitracova

SINGAPORE/LONDON (Reuters) - Banks worldwide are watching the Societe Generale scandal intently and some have started reviewing their risk control systems to make sure they are properly armed against illegal trades.

Germany's biggest bank Deutsche Bank decided to make checks on its risk management systems after the news broke of SocGen's huge losses resulting from unauthorized trades by an employee, a spokesman said at the weekend.

A source inside a major U.S. bank has said the bank had brought forward its regular risk management review after the scandal. The source did not wish to see the bank identified.

Other banks are in wait-and-see mode as the saga unravels.

"When details of the SocGen incident become clearer, we will further evaluate our risk controls to prevent a similar incident from happening," a spokesperson for Singapore's United Overseas Bank said on Tuesday, adding that the bank assessed its systems continuously.

Karen Ngui, a spokeswoman for DBS Bank, Southeast Asia's biggest lender, said: "We take the opportunity to learn from the SocGen episode and also from various other incidents."

"WAKE-UP CALL"

SocGen said on January 24 it had uncovered massive unauthorized stock trading by one of its employees that led to 4.9 billion euros ($7.24 billion) of losses.