Criticism and pressure continued to mount against the French bank Société Générale (SocGen) yesterday, one day after it announced € 6.9 billion in losses due to a rogue trader and bad US subprime loans, writes Lara Marlowein Paris and Simon Carswellin Davos

French prime minister François Fillon asked finance minister Christine Lagarde to make a full report to him within eight days. Mr Fillon said he did not learn of the crisis until Wednesday, four days after the losses were discovered by the bank.

As a private bank, he said, SocGen had no obligation to inform the government. "At the same time, it's an affair of such importance for the French financial system that they might have told the government earlier."

The question asked most insistently is how €4.9 billion in losses on the European futures market by a junior trader could have gone unnoticed. "If there's a bank with an extra strong system of control, supervision and centralisation, it's the SocGen," said an adviser to the bank. "Under [ the chairman Daniel] Bouton, it's run in almost military fashion."

Some critics, in particular those who took heavy losses in the mini stock market crash at the beginning of the week, claim SocGen precipitated the crash by cashing in close to € 50 billion in futures contracts made by Jérôme Kerviel, thus incurring €4.9 billion in losses for itself, but saving the bank.

In its defence, the bank says the crash had already started in Asia, that it spread closures over three days, and that it was a victim of the sudden drop in the market.

Some go so far as to blame SocGen for the US Federal Reserve's decision to lower its lending rate. Monday was a bank holiday in the US. The argument is that the Fed may have acted out of fear that the fall on European markets would spread to Wall Street on Tuesday.

Many commentators believe the fraud attributed to Mr Kerviel may be hiding the extent of French exposure to bad subprime loans. "It masked the subprime losses," said a former official at the French finance ministry.

SocGen had earlier predicted some € 200 million in losses due to defaults on US mortgages. In the event, it lost 10 times that much.

SocGen earlier told investors that it had "very limited exposure" to turmoil in debt markets caused by the US subprime mortgages crisis. Only last week, the governor of the Banque de France said he was "reasonably confident" that French banks would get through the turbulence "without much trouble".

Ireland's EU commissioner Charlie McCreevy, in Davos yesterday, urged against "a knee-jerk reaction" and played down the need to introduce new rules in the wake of the rogue trading scandal at SocGen and the crisis in the financial markets.

Speaking to The Irish Times, Mr McCreevy said it was "bewildering" that Mr Kerviel appeared to have run up the losses on massive transactions.

"Who is responsible first? The management of the particular institution. Do they have appropriate risk controls? At second remove, the regulator is responsible. It is very hard for the regulator and other regulators to know when the management of the bank only came across this last weekend."

Bank of Ireland chief executive Brian Goggin, who is also in Davos, said the latest rogue trading scandal "sent a shiver down his back" when he heard it.

"As long as humans are involved in activities like this, these things will happen. Humans are fragile. If someone goes off the rails, one hopes that you have the controls in place to catch it."

He said Irish banks were less exposed to rogue trading risks as they did little proprietary trading, where a bank's own money is traded.