It was a mystery for the bank to find out how an employee working in a low-trading derivatives position could have taken unauthorized positions totaling €50 billion or double the bank’s capital. He...

It was a mystery for the bank to find out how an employee working in a low-trading derivatives position could have taken unauthorized positions totaling €50 billion or double the bank’s capital. He was involved in the practice of arbitrage, buying portfolios of financial instruments (like European index futures) in one market while simultaneously selling a similar of setting position with a different value in order to minimize risk.