France, Belgium and Luxembourg have approved a plan to secure the future of the troubled bank Dexia, following fears it could go bankrupt.
Details were not released, but reports said the bank will be broken up and partly nationalised.
The plan came after French and German leaders agreed that Europe's crisis-hit banks need to be recapitalised. Dexia asked for help for the second time in three years after a liquidity squeeze sent its shares tumbling. The situation with Dexia is the latest warning sign over the health of Europe's lenders. It has a global credit risk exposure of around $700bn (£449.5bn), twice the gross domestic product of Greece. It is thought the plan will lead to the bank's Belgian retail unit and its French municipal finance operations coming under state control.
Belgium's Prime Minister, Yves Leterme, said: "The three governments have agreed to put a proposal to the board which fits completely with the goals of the Belgian government, which means to take over Dexia Bank Belgium, secure it and turn it into a very safe bank."The burden of bailing out Dexia led to a warning from the ratings agency Moody's that it could cut its rating on Belgium's government bonds.
( source : http://www.bbc.co.uk/news/business-15235915 )
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