Trader blamed for stock turmoil

City watchers said attempts by Societe Generale to clear up the mess caused by the 31-year-old Frenchman - who lost the bank 4.9 billion euros (£3.7 billion) in one of the biggest banking frauds in history - had contributed to widespread falls across global markets on Monday.

Kerviel has yet to be formally sacked by France's second largest bank, for what the company says was an elaborate deception by an "irrational" trader.

It is understood that the firm does not know the current whereabouts of the employee, who was based in its Paris office and confessed to the fraud over the weekend.

The bank said Kerviel managed to rack up hefty losses after gambling away billions of pounds on the direction of stock markets in a series of secret transactions.

It has also not yet confirmed his identity, but he has been named by the media as Kerviel, a junior on its futures desk who joined the bank in 2000.

He was reportedly promoted from the back office to the Delta one trading desk two years ago.

The fraud dwarfs the losses involved in the infamous "rogue trader" case in 1995, which saw Nick Leeson cause the collapse of Barings bank after costing the group £800 million.

Societe Generale described its losses as "colossal", but said the fraud would not bring the bank to its knees.

The situation appears to have been exaggerated by the extreme volatility seen in financial markets in recent weeks. It has been suggested the bank's efforts to unwind the trades could have contributed to the unusual turbulence seen this week.