French bank loses €600m in 'market incident'

Tthe French savings bank Caisse d'Epargne, in the midst of a merger with another mutual bank, said it made a €600 million (US$808.1 million) trading loss earlier this month.

"Due to the extreme volatility in the markets and the bourse crash of last week, the Groupe Caisse d'Epargne has had a significant market incident in share derivatives that has led to a loss in the order of €600 million," it said.

It added that because it had assets of more than €20 billion the loss would not affect its financial solidity and would have no effect for its clients.

Caisse d'Epargne plans to merge with Banque Populaire.

The news came as the French government approved a €360 billion (US$491 billion) rescue plan to protect its banks from collapse and to unblock credit markets.

The text has appeared in today's official register, immediately becoming law.

France's rescue package is part of an unprecedented decision last weekend by the 15 nations sharing the euro currency to unblock frozen credit markets after a tailspin on stock exchanges worldwide.

Both houses of the French parliament moved quickly to approve the plan, spearheaded by President Nicolas Sarkozy.