Belgian PM says nationalised Dexia is “200% safe”

As we reported on Friday, Dexia, the troubled Franco-Belgian bank, has been nationalised over the weekend. At the time, I indicated this would be a negative for the sovereign’s creditworthiness. Moody’s, the ratings agency, agrees and has placed Belgium on review for downgrade.

Belgium will pay €4 billion to buy Dexia Bank Belgium, the Belgian division of the bank with deposits of €80 billion, four million customers, and over 6,000 staff. €90 billion in assets have been placed into a ‘bad bank’ with guarantees from the Belgian, French and Luxembourg governments (60.5%, 36.5%, and 3% respectively).

Below, the Belgian Prime Minister says the new nationalised rump Dexia is safe – or “200% safe” as he is quoted saying by Belgian daily De Tijd.

Meanwhile, what I have been calling ‘the European Bank Run’ has claimed a second victim in Greek bank Proton.

  1. Dave Holden says

    Always good to have that extra hundred percent safety margin!

  2. David Lazarus says

    Well lets see how this pans out. I am not optimistic. I still place Belgium high up the list of default risk and this does not help them.

Comments are closed.

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