Societe Generale, the French investment bank, demanded an official investigation into a fall in its share price today following speculation that heavy losses could force a €10 billion capital increase.

The French bank refuted what it described as 'malicious rumours' and said it had asked the country's Financial Markets Authority to launch a probe.

In a rising market, SocGen's share price slumped by 14 per cent amid talk of losses on structured products and Russia, where it owns 57.5 per cent of Rosbank.

The fall came hours before President Sarkozy was due to give details of France's bank rescue scheme, which is likely to involve a loan guarantee package and the creation of a fund to buy stakes in crisis-hit institutions

SocGen's price rose slightly after SocGen's denial of "malicious rumours that it would have made significant losses on structured products in the past few days that necessitate a recapitalisation of the bank."

Shares were 4.30 per cent down at €47.85 by early afternoon.

The speculation came as SocGen's stake in Rosbank, the Russian bank, which it purchased for €2.77 billion this year, fell to a value of about €800 million amid fears of home loan defaults and panic deposit withdrawls.

Igor Antonov, the deputy chairman of Rosbank, denied his bank had a liquidity or solvency problem last month but added that SocGen would bail it out if it ran into difficulties.

"It is beyond question that Societe Generale will definitely support all of our initiatives," he said. "If all of a sudden something inordinate happens, the group will support us no matter what."

Earlier this year, the bank was plunged into crisis by Jerome Kerviel, the rogue trader who lost €4.9 billion through a series of complex transactions.

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