Since the Crédit Lyonnais trial opened here at the beginning of last week, defendants have divided into opposing camps, each blaming the other for the biggest banking scandal in French history. Together, they stand accused of drawing up false annual reports, disseminating false information, and, in the case of the bank's former management, distributing unearned dividends.  From Lara Marlowe, in Paris

On one side of the dock sat the representatives of the French State: the governor of the French central bank, Mr Jean-Claude Trichet - whose future appointment as President of the European Central Bank is at stake - Mr Jacques de Larosière, Mr Trichet's predecessor at the Banque de France, and Mr Trichet's former deputy at the Treasury.

On the other side, Mr Jean-Yves Haberer, chairman of Crédit Lyonnais from 1988 until he was fired in 1993, sat with his two former deputies and three certified public accountants who signed off on the bank's phoney accounts.

The previous state prosecutor wanted to clear Mr Trichet of all charges, but the new prosecutor, Mr Yves Bot, has brought suspense to the trial by saying he hasn't decided whether he'll ask for a conviction.

Mr Trichet must be either arrogant or confident of being acquitted, for he did not even attend the session devoted to the single biggest folly of the "Crazy Lyonnais", the purchase by the bank of Metro Goldwyn Mayer (MGM) studios.

The Hollywood caper swallowed up 10.5 billion French francs (€1.6 billion) of the state-owned French bank's money. In Mr Trichet's absence, the court studied a memo he wrote to Mr Pierre Bérégovoy, then finance minister, in 1990. In it, Mr Trichet recounted scolding Mr Haberer over a loan by the Dutch subsidiary, Crédit Lyonnais Bank Nederland (CLBN), to the Italian businessmen Mr Giancarlo Parretti and Mr Florio Fiorini, so they could buy MGM. Mr Haberer, Mr Trichet reported, promised not to invest more in MGM - a promise that was quickly broken.

Most of the "evidence" against Mr Trichet consists of written warnings by him, which can be interpreted in his favour or against him. The documents prove Mr Trichet tried to brake Mr Haberer's voracious appetite for acquisitions but also indicate awareness of the bank's unsound dealings.

Mr Haberer claims that Messers Trichet and de Larosière instructed him to draft annual reports in such a way that he respected the Cooke ratio, which demands that a bank hold at least 8 per cent of assets in cash.

The chairman of Crédit Lyonnais, Mr Haberer said this week, "cannot, does not have the training, to worry about specific risks". He claimed he relied on his "security triangle: the certified public accountants, the Banking Commission and the Treasury" to do that for him.

The Banking Commission, under the authority of the governor of the Banque de France, "was like a confessor" Mr Haberer continued. "All the big risks were supervised by them, in a relationship of guardian and ward."

Mr Haberer, whose "management" of the Crédit Lyonnais has cost French taxpayers tens of billions of euros, now receives a monthly pension of €25,000. The judge asked how he got ever more deeply involved with MGM, when newspapers were already reporting its difficulties and a French deputy denounced the links between the bank and the two Italians, who were suspected of money-laundering. "Never did a banking authority, a Bourse authority or the police give us information we were dealing with crooks," Mr Haberer replied.

CLBN lent $145 million to Mr Parretti and Mr Fiorini for their MGM takeover, partly on the strength of a letter signed by the current Prime Minister of Italy, Mr Silvio Berlusconi.

In May 1992, Crédit Lyonnais bought MGM outright, rather than lose its huge investment. Mr Haberer says he did not report MGM's losses because the bank intended to make the studio profitable and recoup its money. Mr Parretti declared MGM bankrupt without notifying Crédit Lyonnais, then refused to step down as chairman.

He served time in a US prison, then jumped bail and fled to Italy to avoid extradition from the US to France for trial on fraud charges.