Government prepared to help Dexia too

30th September 2008, Comments 0 comments

In Fortis style the shares of Dexia Bank and Insurance plunged on Euronext Brussels on Monday. PM Leterme says the government will act responsibly.

30 September 2008

 BELGIUM -- Attention seems to have shifted from Fortis to Dexia bank. On the Belgian stock exchange, Euronext Brussels, the shares of Dexia bank plunged at opening, immediately losing 30 percent.

While the Fortis shares yo-yoed on Monday, attention turned to the Belgian-French bank group Dexia. Spurred by rumours regarding capital injection for Dexia at the opening of Euronext Brussels, the share plunged 31 percent. At closing Dexia was down 31%; Fortis was down 23.7 percent.

Finance Minister Didier Reynders (Francophone liberal) announced before the stock exchange opened this morning that the Belgian state would also stand as a guarantor for Dexia if necessary.

In a statement the Dexia management said that the bank does not have a liquidity problem.

PM Yves Leterme backs his Finance Minister stating that the government would take responsibility in connection with Dexia. The Prime Minister also stressed that the situation at Dexia is not comparable with the situation at Fortis.

The government has been discussing the bank crisis all day, and in particular the situation with Dexia.  It is also worrying that Fortis dropped again by over 20 percent despite the huge capital injection. Regional government representatives are also discussing the situation with the PM.  The regional governments are competent authorities for the municipalities.  The municipalities are shareholders in Dexia.

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