Currency options professionals last week pinned the blame for the USD750 million in fx losses rung up by a rogue trader at Allied Irish Bank subsidiary Allfirst to weak risk controls. "I think the bank's systems of controls are atrocious," one trader said. "At most major money banks, if you don't get confirmation for a trade in two days their pit bulls are all over you." If the firm had used a random confirmation technique it should have realized something was amiss much earlier. "The amount of trades put on to lose that much had to be phenomenal. I don't know how they could have missed it," he added. Officials at Allfirst did not return calls.
John Rusnak, the trader allegedly responsible for the losses, was fairly well known in the market, but not considered a big player. "I've see him periodically, but he definitely wasn't a big hammer in the options market," another trader noted.
