The chairman and director general of the French bank Caisse d'Epargne quit yesterday over a €600m derivative trading loss at the height of the global finance crisis.

Chairman Charles Milhaud said in a statement after an emergency supervisory board meeting that he was taking full responsibility for the loss and would not seek leaving payment.

The director general of the mutual bank also resigned and a bank source said its chief financial officer had tendered his resignation.

The bank said it lost €600m in a derivatives trading 'incident' on October 6 as world share markets were crashing over the global finance crisis. The bank was also entering merger talks with rival Banque Populaire.

Finance Minister Christine Lagarde was 'satisfied' with the resignations, her staff said. But European Central Bank chief Jean-Claude Trichet said he was shocked by the loss which 'proves that there is still immense progress to be made in managing risks' at banks.

'This loss is the result of the exceptional volatility of the markets during this period and the breach of instructions that the board and myself gave,' Milhaud said in a written statement.

'I accept entire responsibility, however. Having devoted my entire life to the Caisse d'Epargne, I have never at any moment considered trying to avoid my responsibilities. Those who know me know that I am not a man of money. I am not asking for any indemnity,' he added.

Milhaud, 65, has been in charge of the Caisse d'Epargne since 1999. Bernard Comolet, head of the bank's Paris region operations, was named as the new group chairman.

Director-general Nicolas Merindol announced that he would leave his post and a bank source said chief financial officer Julien Carmona tendered his resignation.

Milhaud has confirmed that several employees, including the team of traders responsible for the blunder, had been fired.

The scandal revived memories of the disaster at French bank, Societe Generale, which lost €4.9 billion in unauthorised deals made by trader Jerome Kerviel.

News of the loss came in the same week as Caisse d'Epargne directors approved plans to start merger talks with Banque Populaire to form France's second-largest retail bank.

Caisse d'Epargne has 27 million account holders - nearly half of all savers in France - and employs 51,500 people.