French President Nicolas Sarkozy has spoken out in defence of his country's financial standards, in the wake of the rogue trader scandal that cost one of its biggest banks $8.2 billion.

Mr Sarkozy moved to shore up his country's reputation in the financial world, saying the scandal did not affect the "solidity and reliability of France's financial system".

Yesterday Societe Generale filed a legal complaint against 31-year-old trader Jerome Kerviel, accusing him of a massive fraud. The Paris prosecutor's office has also opened a preliminary investigation.

There has still been no public sighting of Mr Kerviel, but his lawyer says he has not left the country and is willing to talk to police. French police have visited his home but his whereabouts remain a mystery.

It has been claimed that the value of Mr Kerviel's dealings was much higher than the actual losses, running into tens of billions of dollars.

Some financial experts are sceptical that he could have concealed such activities successfully.

Some stock market traders believe that the bank's problems contributed to the plunge in world stock markets earlier this week.

Societe General sold huge amounts of shares as it tried to unwind what the French trader had done.

Stock markets across Europe have bounced back partly because of positive signs from the US, but also because many believe the panic selling at the start of the week was made worse by the French bank untangling its dodgy deals.

Financial watchdogs in London and Paris now want to know if anyone knew about the scandal before it became public knowledge, making money as the bank sorted out its problems.