( AP )- Police on Saturday questioned the young trader blamed for a massive fraud that cost France's Societe Generale bank more than $7 billion, as the country's president accused global financial institutions of having "gone haywire" and urged common sense.
The possible motivations of the 31-year-old trader, Jerome Kerviel , remained a mystery, and the bank said it appeared that he made no personal gain from the unauthorized trades.
Judicial officials said Kerviel was taken into custody earlier in the day - two days after Societe Generale's announcement that he was responsible for one of history's biggest frauds. The officials spoke on condition of anonymity because the investigation was ongoing. Under French law, Kerviel can be held up to 48 hours.
Jean-Michel Aldebert , head of Paris' financial police, said Kerviel gave himself up. He "is very well, he's collaborating," Aldebert told reporters.
The debacle further rattled an already nervous banking sector and has fueled a debate about risk management.
"If we can make profits in a matter of hours, we can also have huge losses," President Nicolas Sarkozy said during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
He added: "It appears to be time to ... inject a bit of common sense into all these systems."
French officials said the trader had been dealing with more than $73.3 billion. That figure outstrips the bank's market capitalization of $52.6 billion, and is close to the annual GDP of entire nations such as Slovakia, Qatar or Libya.
It remains unclear whether Kerviel's actions, if proved, were motivated by malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having family problems.
Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors .
Experts and others including France's prime minister have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses.
Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing Kerviel of fraud, and two by small shareholders.
In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton , dismissed the notion that the bank's actions helped fuel the turmoil on world markets.
"It's absurd!" Bouton told Le Figaro daily in an interview published Saturday. "Anyone could calculate our contribution to the market in recent days."
Bouton said Kerviel had been betting throughout 2007 that markets would fall - a winning position. But the trader overstepped his authority and wagered much more money than he should have, Bouton said.
So at the beginning of January, Bouton said, Kerviel voluntarily created losing positions to neutralize his earlier gains and cover his tracks.
But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
Despite the bank's $7.14 billion losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
In Thursday's statement, the company also announced another $2.99 billion subprime -related loss and said it planned to raise $8.02 billion in new capital.
French Finance Minister Christine Lagarde , speaking Saturday at the World Economic Forum in Davos , Switzerland, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why" the bank's security controls failed to prevent the fraud.
The bank says the scale of the damage was so great only because of the bad timing of the discovery - right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at 108.62.