Mumbai: Societe Generale, France's second-biggest listed bank, has reported a 4.9 billion euro ($7.1 billion) loss caused by an alleged fraud by a trader, and said it is seeking emergency funds to tide over the crisis.

SocGen, reeling under the global credit market crisis, said it plans to raise 5.5 billion euros through fresh capital to shore up its balance sheet. The bank is also writing down an additional 2.05 billion euros in bad loans.

Following the finding, SocGen chairman and chief executive Daniel Bouton offered to resign but the board rejected the offer.

The bank did not name the trader, but said it was in the process of dismissing the Paris-based trader and that the trader's managers would leave the company. SocGen sourcee said the trader had been handling futures contracts on European stock market indices, betting on broad share market movements.

The Bank of France announced an inquiry by the Banking Commission. French economy minister Christine Lagarde is expected to make a statement. It was, however, not clear whether the French police were investigating.

If proved, the loss in trading fraud will be the biggest, ahead of the $2.6 billion loss caused to Sumitomo Corp by copper trader Yasuo Hamanaka and the $1.4 billion loss caused to Barings by Nick Leeson, both in the 1990s.

It also eclipses a $6 billion loss racked up by hedge fund Amaranth trader Brian Hunter and his team ahead of its collapse in 2006.

SocGen shares were suspended. SocGen, founded in 1864, is one of France's most prestigious blue-chip companies.

SocGen shares closed down 4.15 per cent at 79.08 euros on Wednesday. The stock has fallen around 20 per cent since the start of 2008.