Dexia, the first victims of the European debt

Dexia bear the burden of payment of 95 billion euros (127.66 billion dollars) of bonds (European)

Plans to the French and Belgian governments complete plans this weekend to split the French Belgian bank Dexia to two.
 It is expected that the bank's board meets tomorrow to discuss the issue.
 And became a bank that provides loans to hundreds of cities in France and Belgium, the first victim of European debt crisis after requesting government assistance because of the inability of liquidity led to a steep fall in its shares on the market.
 The crisis has aggravated due to exposure to Dexia Greek government debt and lack of liquidity has.
 It is noteworthy that both the French and Belgian governments have a 5.7% stake in Dexia.
 The crisis of the Bank of investors worried about the strength of the European banking system and coincided with the reports stated that the European governments is considering the possibility to increase bank capitalization.
 The crisis in the bank is also a warning of the credit rating agency Moody's may cut as Belgium's credit worthiness, citing the weak economy and the possibility of increasing the cost of loans.
 And announced that the French and Belgian governments for guarantees for the financing of Dexia, clearing the way for a rescue plan of the bank, struggling to get rid of billions of euros based assets accumulated during the corrupt plan a major expansion.
 A source close to the talks under way on Mstbakl the bank would be self-determination before the opening of markets on Monday.

Measure of government interventionAccording to some investors that the reaction of governments to the crisis Dexia will be a measure of the size of government intervention to rescue banks if the situation worsened for the European debt crisis.
 Said Eric Galleg President of the Foundation for Research Valquant The need to save Dexia reflects the concern surrounding the European banking sector.
 "Who could have imagined that the bank closely related to the European construction sector will end up to the retailer?".
 Will meet in Berlin tomorrow, French President Nicolas Sarkozy, German Chancellor Angela Merkel to discuss how to use the power of European funding to contain the crisis of government debt that threatens the global economy.
 In Belgium, a dispute broke out between the federal government and the three main administrative regions on the future of Dexia. At a time when the government sees the need to nationalize the bank branch in Belgium feared the three main regions of the country and divided the several states that one billion euros was paid to the bank in the first rescue package in 2008 - during the global financial crisis - may be lost in vain.
 After Belgium solved the problem remains to be internally consistent with the French government to share the funding required to repair the bank's financial situation.
 Financial experts have begun discussions of the two countries on the issue last Thursday, but remains a government intervention.
 Was suspended trading in shares of Dexia in the market since last Thursday and fell by 42% during one week.
 The crisis has prompted questions about the health status of other European banks, despite confirmation of the President of the French bank Societe Generale Frederic O'Dea that the conditions of Dexia special and different and people should not expect other problems in the banking system of Europe.
 Dexia and bears the burden of payment of 95 billion euros (127.66 billion dollars) of bonds issued.


 Source: Reuters + Wall Street Journal