When attendees from a sovereign wealth fund panel in Davos emerged, it wasn't about this topic, until yesterday so hot, that they spoke. Instead, they focused on the woes on Societe Generale, which reported this morning that a fraud by a trader would cost the group 4.9 billion euros ($7.16 billion).
France's second-largest listed bank said it would raise 5.5 billion euros through a capital increase to strengthen its balance sheet, also affected by the global credit markets crisis.
Immediately, everyone started to reminisce about Nick Leeson, the British trader who in 1995 brought down merchant bank Barings after racking up huge losses.
"This will have huge reverberations," a banker at major european bank who was at barings at the time of its collapse said.
"I think the big issue is trust in financial institutions. First you had subprime, then the bond insurers and now this," the banker added.
Societe Generale, whose shares closed lower by 4.1 percent on Thursday, said it was in the process of dismissing the Paris-based trader.
The French bank's troubles may open opportunities for rivals trying to swallow it as consolidation talk is re-emerging.