Friday 1 August 2014
 
»
 
»
Story

Dexia break-up plan seen ready by Thursday

Paris, October 5, 2011

Belgium and France expect to finalise by Thursday a rescue plan for Dexia that would sever the bank's French lending business and may nationalise its Belgian arm.

Battered in recent weeks by heavy exposure to Greece and problems accessing wholesale funds, Dexia's shares hit an all-time low on Tuesday, prompting shareholders Belgium and France to come to its rescue.

"I think that tomorrow a solution should be found," France's finance minister, Francois Baroin, told RTL radio on Wednesday. He repeated that Dexia could not keep its current shape. "It is indisputable."     

Baroin also said a solution involving its absorption by French state bank Caisse des Depots and Banque Postale, the banking arm of the postal service, would be the most "solid". 

The lender to thousands of French and Belgian towns, which also needed propping up after the 2008 crisis, will see its French municipal financing arm broken off and combined with French state bank Caisse des Depots and Banque Postale, the banking arm of the French post office.

Baroin said such a solution would be "most solid". Belgium's caretaker prime minister, Yves Leterme, said nationalisation of the banking activities, including a large retail operation, was being considered.

"One of the possibilities to consolidate Dexia Bank Belgium is, at a certain point, to ensure that it is taken up by the government," Leterme told Belgian station Radio 1.

Leterme also said guarantees Belgium planned to provide Dexia did not represent a risk for the country and, while nationalisation would hit public sector debt, the increase would be "quite limited".

Bank of France Governor Christian Noyer said speculation that support of Dexia would threaten France's AAA credit rating were "exaggerated and inexact".

French banks, he said were generally in good health and central banks of Belgium and France would ensure Dexia had enough liquidity. "We will loan Dexia as much as it needs," Noyers told Europe 1 radio. - Reuters




Tags: France | Belgium | Dexia |

More INTERNATIONAL BUSINESS Stories

calendarCalendar of Events

Ads

Buy high quality China wholesale Health & Beauty , Electronics, Sports & Outdoors , Computers, Video Games, Toys & Hobbies Cell Phones, Automobiles and other wholesale products directly from reliable Chinese wholesalers or Factories on DHgate.com