French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were ignored before the banking giant announced massive losses attributed to a single trader.
Here is one version of the story. It’s gotten plenty of news coverage. It’s gotten relatively little pundit coverage. It neither fits the pro-market narrative of one side, nor the "blame it on the Bush administration and deregulation and bad U.S. corporate governance" narrative of the other. By noting the story, and pondering its broader implications ("your favorite hobby horse matters less than you think"), I would like to do my small amount to counteract the silence of the pundits. By the way, I owe this concept to Daniel Klein.