Dexia gets EUR 6.4 billion rescue
France, Belgium and the Netherlands bail out Dexia as the US financial crisis affects Europe.30 September 2008
BRUSSELS -- Belgium, France and Luxembourg agreed to add EUR 6.4 billion into the troubled Franco-Belgian bank Dexia, Belgian Prime Minister Yves Leterme said Tuesday.
The rescue plan, reached after a long night of negotiations, is intended to restore confidence in the stock markets after Dexia shares dropped by nearly 30 percent on Monday.
According to the plan, Belgium will invest EUR 3 billion in Dexia. The French government and the French state financial institution Caisse des Depots will add another EUR 3 billion while Luxembourg will loan EUR 376 million.
Dexia was founded in 1996 in the joining of France's Credit Local and Belgium's Credit Communal. While Dexia is the world’s largest lender to local governments, it also has 5.5 million individual clients in Belgium, Luxembourg, Slovakia and Turkey.
On Sunday the governments of Belgium, The Netherlands and Luxembourg partly nationalised the leading Belgian bank, Fortis, as the US financial crisis affected Europe.
[AFP / Expatica]