Dexia on the brink

Three years after its first bailout, “Dexia is fighting to survive,” headlines De Morgen, in the wake of an emergency meeting of the Franco-Belgian bank’s board of directors on 3 October — a meeting that continued today. “Rumours of the imminent break-up of Dexia have been completely ignored by the press release which makes no mention of a deal on this issue,”writes the Flemish daily. If the rumours of a carve-up are confirmed, Dexia’s “healthy” assets will be sold, while its “toxic” assets will be taken over by a “bad bank.” According to De Morgen, Belgian Prime Minister Yves Leterme has affirmed that, “if necessary,” the Belgian government will act as a guarantor for Dexia. Rival daily De Standaard reports that on 4 October, “shares in the bank fell by 37% after markets opened […] and were still down by 20 % shortly before midday.” According to Bloomberg, it is the group’s biggest drop in share value since 1996.