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.

2 Comments
  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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