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The Lagarde Report was issued by the French government on February 4th. It detailed the lack of controls at Societe Generale that may have resulted in the loss of €4.9 billion by the bank.
Enablon, a leading provider of risk and EHS management solutions with presence in the U.S. and Europe, and whose customers include 40 percent of the top French banks, analyzes and comments on the effectiveness of this report.
Paris - February 7, 2008
The following is a detailed analysis by Enablon of the report's recommendations.
According to Enablon, the Lagarde report includes three main recommendations:
- Recommendations aimed at reinforcing existing regulations and practices.
- Recommendations that can be easily applied, most likely through an immediate yet limited improvement in internal banking controls.
- Recommendations that would have a decisive impact but require further detail for implementation before they are applied.
Enablon believes that the Lagarde report includes some of the necessary guidelines for reinforcing internal control. While providing analysis, this report makes no specific recommendations for actions that are essential in order to improve internal control procedures. In this document, Enablon analyzes the capacity for implementing the report's recommendations within banks and suggests the need for further consideration.
Analysis of the Lagarde Report's recommendations
| Article |
Sub-article |
Effective-ness
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Implemen-tation
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4.1
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Sending terms to each operator in
writing |
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4.1
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Reinforcing internal control procedures:
transaction monitoring, etc. |
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4.1
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Ensuring front office-middle office
independence |
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4.2
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Introducing risk mapping for each
business line |
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4.3
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Setting up a dedicated department
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4.4
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Setting up committees of independent
individuals |
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4.5
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Increasing applicable penalties
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© Enablon 2008 - Legend: 1 to 3 stars indicate, for Effectiveness: least effective to most effective, and for Implementation: easiest to most difficult to implement.
About Enablon
Enablon provides financial, environmental and legal risk management software solutions.
More than 120 global companies use Enablon solutions to strengthen their compliance, evaluate, manage, control their risks and enhance their overall performance.
Enablon solutions offer a rapidly implemented, practical and effective response to:
- EHS and corporate responsibility reporting and management
- Incident management and risk prevention
- Risk management within banking institutions
- Internal audit and control management
- Compliance audits and certifications tracking
- Greenhouse gas emissions management
For more information about Enablon, please visit: www.enablon.com.
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