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Jaws were collectively dropping around the City on Thursday as bankers and traders sought to take in the sheer magnitude of the fraud perpetuated at SocGen.

As SocGen employees were greeted by early morning emails from managers entreating them to answer no queries from clients until further notice, it seemed likely that the rogue trader in question was based in Paris, where most of the bank’s equities business sits.

But onlookers expressed astonishment, and disbelief, that a fraud of this scale could have been carried out and kept hidden.

“I think there’s much more to be told here,” said one senior figure at a rival bank. “My personal view is that it is nigh on impossible for this to have happened as it has been told.”

The type of instruments in question, plain vanilla futures, are straight-forward products; not the type of esoteric financial engineering which has generated so much angst for the banks in recent months.  With even the worst performing European equity markets off 20 per cent since the beginning of the year, to rack up a €5bn loss, the banker pointed out, would require a delta of at least €25bn. In reality, the position in question may have needed have been between €30bn to $40bn to generate such vast losses.

It’s unimaginable that someone would have that position without it being someone knowing about it.  People will question whether there’s a much bigger problem within their structured product business. I don’t think this is the whole story.